EUR / USD: Three main determinants

(News Bulletin 247) – Three major determinants to note on the Euro / Dollar currency pair:

The first – and this is the most obvious – is the recent history, powerfully bearish, which means that even in the absence of major benchmarks, the single currency remains under great pressure.

The second is the reaction of the equity markets on both sides of the Atlantic, to announcements of ultimately less dangerousness than initially feared on the Omicron variant.

And the third is the nervous wait for the next US inflation figures, with the Consumer Price Indexes on Friday. A raw material of choice for the Fed in its monetary thinking. The goal of the speakers is to refine the expected number of increases in federal rates over the year 2020, in the context of a rise in prices which has nothing more, according to J. Powell’s own admission, transitory. .

On the health issue, it is the phew of relief, allowing the single currency, benchmark barometer of risk appetite, to keep its head above water. the director of the emergency department of the WHO, Mike Ryan, reassured on the dangerousness of Omicron. Anthony Fauci, the Mr. Health of the White House, relying on the information provided by South African doctors had already been relatively optimistic Monday on the degree of dangerousness of Omicron, the new variant of the coronavirus. The scientist – appointed in January 2020 to the crisis unit formed by Donald Trump against the coronavirus, and confirmed by his successor Joe Biden as his main adviser in the matter – was even more affirmative on Tuesday during an interview telephone to AFP. While it will take at least two weeks to determine this precisely, “it is almost certain” now that Omicron “is not more serious than Delta.” Better, some signs suggest “that it could even be even less severe”. Conversely, Anthony Fauci believes that the new variant is “clearly highly transmissible”, arguably more than Delta.

Yesterday in the statistical chapter, the German “ZEW” came out in the immediate vicinity of 30 points, in very slight contraction compared to the consensus, and thus largely beating the target. ZEW Chairman Professor Achim Wambach however made the following cautious comments: “The German economy is suffering significantly from the latest developments in the COVID-19 pandemic. Persistent bottlenecks weigh on production and retailing. Falling economic expectations show that hopes for much stronger growth over the next six months are fading. In particular, earnings expectations of export-oriented and consumer-related industries are assessed more negatively ”.

To be continued on the agenda this Wednesday, to follow as a priority the new job offers (JOLTS) in the United States at 4:00 p.m. and crude stocks across the Atlantic at 4:30 p.m.

At midday on the forex market, the Euro was trading against 1,1290$ about.

KEY GRAPHIC ELEMENTS

The short current was strongly reinforced by the break of a technical zone at 1.1530, on marubozu on November 10th. This is a major fact, which resulted in a massive release of selling energy. The short term is aligned with the medium term, bearish, on the Euro / Dollar currency pair, but the entry point is no longer optimal, as the probabilities of the formation of a protest rebound increase at this stage. Traders will temporarily prefer to stay out of the spot while waiting for a suitable entry point. A break from the low points of November would give a signal.

MEDIUM-TERM FORECAST

In view of the key graphical factors that we have mentioned, our opinion is neutral in the medium term on the pair Euro Dollar (EURUSD).

We will keep this neutral opinion as long as the price of the pair Euro Dollar (EURUSD) is positioned between the support at 1.1150 USD and the resistance at 1.1360 USD.

DAILY DATA CHART

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