EUR/USD: Orange light

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If the decision, at the heart of last week not to completely put on hold the process of raising federal rates will have allowed the Dollar to raise its head a little, the hemorrhage on the Euro is temporarily stopped on Monday, with the support from a statistical publication in Germany, and reassuring messages from various authorities on banks.

Christine Lagarde, for the attention of the leaders of the European Union at the summit on Friday, (re) affirmed the resilience and solidity of the banking system. Across the Atlantic, the Treasury and the Fed, together, also made remarks deemed reassuring. “The Treasury, the Fed and the political powers, want to be reassuring on the current banking crisis, but the data of the American Federal Reserve, show strong tensions on the system. Indeed, after a year of balance sheet reduction on the part of the Fed, leading to a decrease of 650 billion, the balance sheet has increased again by nearly 400 billion in just two weeks. At this rate, the QT (quantitative tightening) started in March 2022, will be completely erased at the beginning of April”, comments Vincent Boy (IG France) in a note this morning.

Germany’s IFO business climate index rose to 93.3, beating expectations. This is its fifth consecutive increase. “This positive development was mainly driven by business projections; companies also rated their current business as somewhat better. Despite turbulence in some international banks, the German economy is stabilizing.” can we read in the press release accompanying the raw data.

At midday on the foreign exchange market, the Euro was trading against $1.0770 approximately.

KEY GRAPHIC ELEMENTS

Around a 50-day moving average (in orange), whose orientation becomes horizontal, the technical messages delivered are progressively dual, without one camp or the other uniting. Opinion is therefore neutral on the flagship currency pair pending a concordant array of clear graphical and technical indices.

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 1.0550 USD and the resistance at 1.0875 USD.

CHART IN DAILY DATA