The EUR/USD pair is showing little movement, hovering around 1.1690 as of this writing, maintaining a bearish trend from December’s high. Recent inflation data from the eurozone indicates that price pressures aren’t strong, with the euro remaining stable near a three-week low, as investors eagerly await key U.S. jobs figures.
Eurostat reported on Wednesday that the harmonized consumer price index (HICP) decreased to 2.0% in December, down from 2.1% in November, which aligns with expectations. In addition, core HICP growth reduced to 2.3% year-over-year from 2.4% the previous month, slightly surpassing the consensus for a hold at 2.4%.
Despite rising geopolitical tensions, market reactions have been muted. The intervention in Venezuela by the U.S. hasn’t led to a significant regime shift, and President Trump has unveiled a $2 billion agreement to import Venezuelan oil.
The spotlight today remains on the upcoming U.S. JOLTS job openings data and the ADP employment report. These statistics will set the stage for Friday’s essential nonfarm payroll report, expected to provide insight into the Federal Reserve’s monetary policy trajectory.
Daily Digest: Market Movements as Data Approaches
- The EUR/USD was trading within a tight range on Wednesday as traders awaited crucial U.S. job data to gauge the Federal Reserve’s potential monetary easing.
- New German statistics highlighted a 0.6% drop in retail sales for November, following a 0.3% decline in October, contrary to market predictions for a 0.2% increase. Year-over-year, retail consumption did rise by 1.1%, slightly better than October’s 0.9% growth.
- These developments followed a weaker-than-expected Harmonized Index of Consumer Prices in Germany, which fell to 2.0% in December from November’s 2.6%, missing the market’s consensus of 2.2%.
- The S&P Services PMI for the euro area in December was adjusted downwards to 52.4 from a prior estimate of 52.6, compared to November’s 53.6.
- In the U.S., the ADP jobs report released Wednesday estimated a net increase of 47,000 jobs in December, offsetting a drop of 32,000 in November.
- Additionally, the U.S. Bureau of Labor Statistics is expected to announce a decrease in November JOLTS job openings to 7.6 million, down from 7.67 million in October.
- Attention will also be on the U.S. ISM Services PMI, projected at 52.3 for December, a slight dip from November’s 52.6, yet still indicating robust growth.
Technical Analysis: EUR/USD Shows Continued Downward Trend
The EUR/USD pair has entered into a bearish correction from its late December high of 1.1808, finding support around 1.1650. Indicators on the 4-hour chart reveal a neutral to negative bias. The MACD histogram is lingering near zero, indicating a lack of momentum, while the RSI remains in a negative zone around 40.
On a downward trajectory, Monday’s low of 1.1659 is key, as it leads toward the lows from December 8th and 9th, particularly near 1.1615. Meanwhile, upward movements seem capped below 1.1700. A further target for upward movement includes the downtrend line from the December low of 1.1735 and Tuesday’s high of 1.1740.
Economic Indicators
ADP Employment Change
This measure of private sector employment, published by Automatic Data Processing, assesses the change in the number of private payrolls in the U.S. Typically, an increase here signifies positive consumer spending and growth, making higher figures bullish for the dollar and lower figures bearish.
Jobs at JOLTS
JOLTS, a survey from the U.S. Bureau of Labor Statistics, provides insights into the job market by collecting monthly data from various employers.
