(News Bulletin 247) – The Euro remained well oriented against the Dollar at the end of the week, against a backdrop of the beginning of a gradual exit from the Zero Covid policy in China. The risky asset represented by the single currency can only benefit from the consequences of a relaxation of a health policy which was becoming absurd, even in the eyes of an exasperated population.
The Dollar, for its part, continued to fall with the surprisingly flexible tone used by the Fed boss at the beginning of the week. The Chairman of the Fed, presenting his economic outlook to an audience at the Brooking Institution (Washington DC), made it clear that the path to slowing the pace of rising Fed Funds was topical, after some signs of easing on the inflation front. In the wake of the speech, the probabilities, already in the majority since the Minutes, of a 50 basis point increase in the main key rate have taken off, reducing the scenario of a 75 basis point increase to almost nothing. for the next deadline. This scenario has just been corroborated by the publication of the PCE (Personal Consumption Expenditures) consumer price index, the Fed’s favorite measure in its inflation assessment, showing a monthly increase of 0.2% (vs. consensus at 0.3%).
It is now towards American employment, and the extent of its tensions, that all the eyes of forex traders are trained: the NFP report (No Farm Payrolls) will be published at 2:30 p.m. (Paris time) and will be an opportunity to measure any voltage variations in certain key sectors. Tensions themselves generating inflation… We had a few things to chew on throughout the week (JOLTS, registrations for unemployment benefits), and above all the investigation by the private firm ADP, which did not put highlight “that” 127,000 job creations in the private sector (excluding agriculture).
At midday on the foreign exchange market, the Euro was trading against $1.0540 about.
KEY GRAPHIC ELEMENTS
Volatility remains high on the spot which traces a broad consolidation, whose structure remains to be defined, around $1.0300. A continuation of these nervous oscillations is the preferred option, an unattractive graphic scenario for taking positions. We would prefer to stay out of the spot for the time being. The flag terminals are clearly marked, between 1.0240 and $1.05. The eventual formation of a diamond figure is not excluded.
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 maintain this neutral opinion as long as the Euro Dollar (EURUSD) parity prices are positioned between the support at 1.0288 USD and the resistance at 1.0484 USD.
CHART IN DAILY DATA
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