(News Bulletin 247) – Sudden halt in the rebound of the Euro against the Dollar, rebound initiated on May 13 and amplified at the very beginning of the week with rather offensive remarks from the President of the ECB. As a reminder, the European Central Bank plans to exit negative rates at the end of the third quarter, according to statements by Christine Lagarde. The European institution is tightening its monetary policy in the face of the acceleration of the rise in prices in the euro zone. Not yet enough to make the Euro more attractive than the Dollar on the foreign exchange market, but enough to provide fertile ground for a rebound, already initiated on technical bases.
But as of yesterday (Tuesday), risk appetite fell overall, partly due to missed targets on US macroeconomic indicators (IHS PMI, new home sales and the Richmond Fed manufacturing index).
To follow for forex traders this Wednesday the traditional Minutes of the Fed, at 8:00 p.m. (Paris time). For Vincent Boy (IG France), “the tone is still on the tightening of monetary policy, but fears of recession could change the discourse in the coming months. We expect at least two rate hikes of 50bps during the next FOMC , but it is very likely that the Fed will then decide to take a break, so as not to worsen the economic situation.”
The Federal Reserve will be particularly attentive on Friday to the publication of the PCE prices (Personal Consumption Expenditures Index), its favorite measure of price dynamics.
At midday on the foreign exchange market, the Euro was trading against $1.0660 about.
KEY GRAPHIC ELEMENTS
The underlying trend remains bearish, but the absence of an interesting entry point makes it impossible to position oneself serenely. Below the 50-day moving average (in orange), with unchanged bearish tilt, the picture remains bleak in any case. In the immediate future, the plot of a lateral drift between the 2 remarkable moving averages represented is the chosen option.
MEDIUM TERM FORECAST
In view of the key graphic factors that we have mentioned, our opinion is neutral in the medium term on the Euro Dollar (EURUSD).
We will maintain this neutral opinion as long as the Euro Dollar (EURUSD) parity prices are positioned between the support at 1.0454 USD and the resistance at 1.0758 USD.
CHART IN DAILY DATA
©2022 News Bulletin 247
I am currently a news writer for News Bulletin247 where I mostly cover sports news. I have always been interested in writing and it is something I am very passionate about. In my spare time, I enjoy reading and spending time with my family and friends.
