(News Bulletin 247) – The Euro consolidated against the Dollar, hinting at the formation of a combination of candles called “ascending method” (still to be validated), against a background of risk appetite, after the publication last week confirmation of a marked slowdown in inflation across the Atlantic. Volatility may return on Tuesday, with the return of macroeconomic benchmarks and Wall Street, which remained closed yesterday due to a holiday.
The latest CPI figures “do not invite temperance and further comfort the proponents of a faster-than-expected Fed dovish pivot and a soft landing for the American economy (soft landing)”, for Sébastien GRASSET (Auris Management). “This belief is also fueling the depreciation of the dollar and providing support for risky assets.” Family of which the single currency is an eminent member…
Currency traders will in particular follow the publication at 2:30 p.m. of the NY Fed’s manufacturing index (index Empire State), expected to rise, albeit still in negative territory, at -8.7. For the time being, currency traders have just become aware of the ZEW index of confidence in the German economy, which rose very sharply, returning to positive territory unexpectedly, at 16.9. A first since February 2022“that is the month of the beginning of the war in Ukraine” notes the president of the ZEW, professor Achim Wambach.
The score shows “a noticeable improvement in the economic situation over the next six months. The more favorable situation on the energy markets and the brakes on energy prices imposed by the Confederation have contributed to this. In addition, export opportunities for the German economy are improving thanks to the lifting of Covid restrictions in China. earnings expectations of export-oriented and energy-intensive sectors have improved significantly. The prospect of a further decline in the inflation rate is leading to improved expectations for consumer-related sectors.”
At midday on the foreign exchange market, the Euro was trading against $1.0820 around.
KEY GRAPHIC ELEMENTS
The output of tidied up is now fully validated at the start of 2023. Two events to watch, on the technical front in the immediate future: the attitude of the spot close to its 20-day moving average (in dark blue) and the formation, in progress but not yet validated, of a combination of candles in “ascending method”.
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 1.0435 USD and the resistance at 1.0855 USD.
CHART IN DAILY DATA
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