(News Bulletin 247) – Market psychology remained unchanged on the foreign exchange market, concerning the Euro / Dollar currency pair, the single currency continuing to hold its own against the note, in a context where risk appetite was only ‘hardly upset by the disappointment over the downgrade in growth of Microsoft’s cloud computing services division. The latest European statistical figures continue to militate for a soft landing for the three main economic powers of the Euro Zone (Germany, France, Italy), while traders are already projecting themselves towards major American appointments: publication of PCE prices tomorrow and from the first FOMC of the year, on February 1.
“The Fed has […] abandoned the 75bp increases, after 4 successive ones and could even, according to the expectations of market players, increase by only 25bps at the FOMC on February 1st”, notes Vincent BOY (IG France).
In terms of statistics, the IFO business climate index in Germany came out perfectly on target, at 90.2, a slight increase. “In industry, the index continued its upward trajectory. Companies rated their current situation as better. Their expectations for the next six months were also significantly brighter. Order volumes are falling but remain at a high level Production is expected to increase in the coming months,” the institute said.
Earlier in the week, the highly anticipated 1st estimates of the PMI indicators confirmed this framework. The German industrial component, which traditionally has a strong impact, even rose above the 50-point mark, which separates, as a reminder, a contraction from an expansion in the sector in question. Passage above 50 also to report for the services component of the whole of the Euro Zone.
To follow as a priority on the macroeconomic agenda this Thursday, across the Atlantic, the first estimates of GDP in Q4, durable goods orders, weekly registrations for unemployment benefits, the trade balance of goods and inventories of wholesalers, at 2:30 p.m.
At midday on the foreign exchange market, the Euro was trading against $1.0900 around.
KEY GRAPHIC ELEMENTS
In the absence of validation of a configuration in ascending method, a continuation of neutral oscillations, in thin range near the moving average to 20 days (in dark blue) is expected. The very structure of the ongoing consolidation nevertheless testifies to the advantage taken by the Euro at the start of 2023.
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 1.0645 USD and the resistance at 1.1190 USD.
CHART IN DAILY DATA
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