(News Bulletin 247) – The Euro, one of the reference barometers of risk appetite on the financial markets, followed the main equity indices in Europe (CAC and DAX) during this first part of the week. Note that the main equity indices across the Atlantic are expected to rise on Tuesday, after a holiday Monday (JuneTeenth). A welcome bit of fresh air after a very rough week, with the resolutely austere and offensive tone of the great fundraisers across the planet. The latter are determined to tighten the tap firmly to fight against galloping inflation, even if it means weakening growth.
“Markets should expect a strong rhetoric on accelerating monetary policy tightening in the coming months. This could confirm another 75 basis point hike in July and another 50-75 basis points next September”, comments Vincent Boy, Market Analyst at IG France. “The Fed and other central banks want to believe they can engineer a ‘soft landing’ – but it’s proving increasingly complicated,” said César Perez Ruiz, Chief Investment Officer and CIO at Pictet Wealth Management.
No major statistical figures were on the agenda Monday. The rest of the week will nevertheless be dense on the statistical front with, among other events, sales of new homes across the Atlantic today, the European consumer confidence index on Wednesday, PMI activity indicators (data flash for the current month) on Thursday, German IFO and U-Mich revised US consumer confidence data on Friday.
At midday on the foreign exchange market, the Euro was trading against $1.0550 about.
KEY GRAPHIC ELEMENTS
The failure at the contact of the 50-day moving average (in orange) is now recorded, and the bearish targets in the direction of $1.0350 and $1.0250 are locked. A close at the weekly lows in week 23 reinforced the bearish message. A new contact with the aforementioned trendline would further strengthen the quality of the entry point.
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 1.0350 USD and the resistance at 1.0758 USD.
CHART IN DAILY DATA
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