(News Bulletin 247) – The Dollar lost some pips yesterday against the Euro in the publication of Minutes with a relatively more “accommodating” tone – with the necessary quotes – than anticipated. This report was a clear opportunity to refine the neutral rate outlook and anticipate the future shape of the yield curve. Fed Funds. While judging the need to continue the fight against inflation, the members think “appropriate”, in their majority, the scenario of a slowdown in the rise in Fed Funds. A rising curve, therefore, but a little flatter, with a point of arrival (terminal rate) which can be significant.
On the macroeconomic side, the operators took note of the PMI (activity barometer indicator calculated after surveys of purchasing managers) in the Euro Zone. The deviations from the consensus are rather limited, although all the components remain significantly below the 50 mark. The only good surprise concerns the German industrial score which is up 1.6 points. Across the Atlantic, weekly claims for unemployment benefits, without showing any relaxation on the employment front, came out above the consensus level for week 46, at 240,000 new units. Durable goods orders, excluding transport equipment, gained 0.5% month on month in October, beating the target.
American benchmarks will be extremely rare until the beginning of next week, due to the Thanksgiving holidays. Wall Street will also be closed on Thursday, and will only reopen tomorrow for a shortened session.
In the immediate future, traders will have been pleasantly surprised to note the stronger than expected progression of the IFO business climate index in Germany, to 86.3. The Director of the IFO, Dr Klaus Wohlrabe, provided the following reading keys: “In the manufacturing industry, the index rose markedly, companies were much less pessimistic about the future, but in industries with high energy intensity, uncertainty has increased further. […] Expectations have risen somewhat, but remained deeply pessimistic.”
At midday on the foreign exchange market, the Euro was trading against $1.0400 about.
KEY GRAPHIC ELEMENTS
Volatility remains high on the spot which traces a broad consolidation, whose structure remains to be defined, around $1.03. A continuation of these nervous oscillations is the preferred option, an unattractive graphic scenario for taking positions. We would prefer to stay out of spot immediately.
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 1.0175 USD and the resistance at 1.0484 USD.
CHART IN DAILY DATA
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