(News Bulletin 247) – Palpable nervousness in the foreign exchange market as the statistical climax of the week approaches, namely the monthly dynamics of consumer prices in the United States, one of the measures of choice, as “PCE” prices or even the money supply, for the Fed in its assessment and appreciation of inflation. Inflation which no longer has anything “transitory” by J. Powell’s own admission. The meeting is all the more important as it precedes the last meeting of the Monetary Policy Committee (FOMC) of the year, next week.
Excluding food and energy (the most volatile elements), prices are expected to increase monthly by 0.5%. Taking into account the largest basket of products, prices are expected to rise 0.7% in November, against + 0.9% in October, still at a monthly rate.
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. . “The question of the number of rate hikes is at the heart of the debates. [Les opérateurs ] “now foresee three rate hikes next year, while maintaining those anticipated for 2023. The possible change in the Fed’s monetary policy trajectory has triggered a sharp increase in market volatility”, for Mabrouk Chetouane, director Research and Strategy of BFT Investment Managers. However, this number of expected increases may change rapidly.
Yesterday currency traders took note of weekly registrations for unemployment benefits in the United States, in contraction stronger than expected, to 184,000 new registrations according to the latest figures from the Department of Labor.
Forex traders will also follow the Consumer Confidence Index (U-Mich) in preliminary data at 4:00 p.m.
At midday on the forex market, the Euro was trading against 1,1270$ 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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Source: Tradingsat
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