(News Bulletin 247) – The Euro continued to fall against a Dollar which took advantage of its safe haven attributes, in a market atmosphere weighing on all risky asset classes, as the essential wave approached business results in the second quarter. Wave which will constitute a test of resistance in an uncertain environment (Covid, geopolitics), against a backdrop of galloping inflation on both sides of the Atlantic.
The risks of a cut of the Russian “gas valve” in the direction of Western Europe weigh heavily.
Forex traders dialed in to the monthly NFP (Non Farm Payrolls) survey on Friday. Report whose content is rather reassuring in the sense that the Fed’s dread of a runaway price/wage spiral has been postponed for the time being. The American economy managed to create 372,000 jobs in the private sector (excluding agriculture), well beyond expectations, without unduly booming wage dynamics (+0.3%). As for the unemployment rate, it remains stable at 3.6% of the active population, marking almost full employment, on its pre-Covid levels.
Sebastian Paris Horvitz, of La Banque Postale Asset Management, notes that “the job market situation remains very tense, which is reflected in the continued increase in the average hourly wage. Two things must be remembered, on the one hand, the American economy continues to expand and is not yet very close to a recession and, on the other hand, these figures should confirm the Fed in its policy of rapid short-term rate hikes, including in particular a new up 75 bps at the next monetary policy meeting on July 26-27.”
If this Monday, the statistical menu is relatively poor, it will not be the same for the rest of the week with, among other important benchmarks, that is to say able to cause, if necessary, deviations on the currency pair: the ZEW index of confidence in the German economy tomorrow, the consumer price index in the United States on Wednesday, the producer price index in the United States on Thursday, retail sales and US consumer confidence (U-Mich) in preliminary data on Friday.
At midday on the foreign exchange market, the Euro was trading against $1.0110 about.
KEY GRAPHIC ELEMENTS
the spot is breaking a fragile neck line from a pattern chartist, which sends a clear bearish message. Our immediate objective is to achieve, in growing volatility, the perfect parity, namely one euro for one dollar. If necessary and in the long term, a powerful rebound could take shape. The bearish entry point is no longer ideal. A strong Euro rebound is counter-intuitively imminent. When the time comes, the 50-day long moving average (in orange) will serve as our target.
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 keep this neutral opinion as long as the Euro Dollar (EURUSD) parity prices are positioned between the support at 1.0000 USD and the resistance at 1.0250 USD.
CHART IN DAILY DATA
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