EUR/USD: US inflation does not erode risk appetite

(News Bulletin 247) – The buying and selling forces will finally be balanced on Tuesday, with the graphically perfect illustration of the doji, according to the consecrated Japanese nomenclature, in the wake of the publication of the US inflation figures for the month of January.

At an annualized rate, and for the largest basket of products, consumer prices increased by 6.4%, slightly slowing compared to December, while expectations were more “optimistic” (+6.2% ). Operators are gradually digesting the prospect of maintaining a firm monetary policy throughout 2023. Excluding food and energy, prices rose monthly by 0.4%, within the target.

A market which, without unduly ebbing its optimism, remains present on so-called risky assets, fully integrating the fact that a ebb of inflation is not for now. Its “control” through an appropriate monetary policy is more important.

Sébastien Grasset, Director of Asset Management at Auris Gestion, noted at the beginning of the week, in a weekly note, that “the President of the Fed recalled that the fight against inflation “will take a lot of time” and that the The road would be “long, even bumpy” to return to the 2% inflation target. Further rate hikes could therefore prove necessary if the American economy were not to slow down enough, the main point of attention. remaining inflation in services and tensions in the labor market.”

To be followed as a priority on the macroeconomic agenda this Wednesday, the trade balance in the Euro Zone at 11:00 a.m., and across the Atlantic: retail sales and the Empire State manufacturing index at 2:30 p.m., as well as the federal monthly report on industry at 3:15 p.m. Note also an intervention by Mrs. Lagarde, President of the ECB, before the European Parliament in Strasbourg, at 3:00 p.m.

At midday on the foreign exchange market, the Euro was trading against $1.0730 approximately.

KEY GRAPHIC ELEMENTS

The EURUSD spot is rolling around its 50-day moving average (in orange), without any sharp technical signal emerging. Note that an acceleration in downward volatility would fully validate a break, which occurs following a gradual weakening from February 6 to 9.

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 1.1045 USD.

CHART IN DAILY DATA