(News Bulletin 247) – The Euro/Dollar returned to a level of parity ($1 for €1), while the Fed’s latest FOMC is still being interpreted in the trading rooms. The different readings that can be made of it are far from being binary, and the components of the equation are becoming more complex. César Perez Ruiz, Head of Investments and CIO at Pictet Wealth Management notes that J Powell “suggested that the final Fed Funds rate – estimated at 4.6% in the central bank’s dotted trajectory – could be revised at the end of the day. rise (the market currently anticipates a final rate close to 5.2% in mid-2023).”
“The process of raising rates could therefore be slower, but also longer, while aiming higher,” analyzes the asset management decision-maker.
The main macroeconomic events of the week are consumer prices on Wednesday and the consumer confidence index (U-Mich) on Friday. The results of midterm elections will also be scrutinized. All the seats in the House of Representatives will be renewed and more than a third of those in the Senate. “According to the latest polls, the Republicans are the big favorites to regain the majority in the House of Representatives. The race is tighter in the Senate where the Democrats have a chance to maintain a narrow majority”, note the economists of Oddo BHF. “The loss of just one of the two chambers of Congress would be enough to rekindle the arguments between the two parties over the budget and the federal debt ceiling,” they warn.
The energy of pullback was maintained by two publications which stand out significantly above expectations: German industrial production (+0.6% in September on a monthly basis) and the Sentix index of investor confidence in the Euro Zone which at -30.9, although in negative territory, made a good comeback. The firm specializing in behavioral finance provided the following reading keys: “The global index rose by 7.4 points to -30.9, which is still not a signal of a trend reversal. But the rise in Situation and anticipation values show how sensitive investors are reacting in their economic expectations to signals from the energy market, because this is the cause of the promising changes.October showed higher temperatures than usual and that means gas storage facilities in Germany, for example, are full to the brim, more than expected for November, spot market gas prices have crashed and fears of a catastrophic gas shortage are fading.”
At midday on the foreign exchange market, the Euro was trading against $0.9995 about.
KEY GRAPHIC ELEMENTS
In significant volatility, the currency pair has successively drawn two marubozus in daily data, of equal magnitude, and of comparable level, around the perfect parity, which continues to constitute a pivot level in the immediate future. The current main issue is positioning relative to the 50-day moving average (in orange). Knowing that the last green body dates from the “session” of 10/26, and that this trendline is in the phase of reaffirmation of its negative slope, we will speak of false exit and reintegration. We are now witnessing a second pullback on the perfect parity (1 Dollar per Euro). The bearish message is therefore reinforced.
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 0.9665 USD and the resistance at 1.0175 USD.
CHART IN DAILY DATA
©2022 News Bulletin 247
I have over 8 years of experience working in the news industry. I have worked as a reporter, editor, and now managing editor at 247 News Agency. I am responsible for the day-to-day operations of the news website and overseeing all of the content that is published. I also write a column for the website, covering mostly market news.
