EUR/USD: Measuring price warming is essential

(News Bulletin 247) – Forex traders are nervously awaiting US inflation figures, in the sense of the various consumer price indices, and that although the Fed traditionally prefers the PCE barometer (Personal Consumption Expenditures). Excluding food and energy, prices are expected to rise by 0.5% for the month of December, on a monthly basis. Verdict at 2:30 p.m.

In the immediate future, the Euro was pointing at the upper end of the thin range, in the immediate vicinity of $1.1360, thanks to the reflux of 10-year Treasuries yesterday, after J. Powell lowered the temperature… Asked Tuesday by the Senate on the institution’s strategy to fight inflation in the United States, J Powell has “promised to do everything possible” during his second term to fight against rising consumer prices, while the CPI index rose at a pace not seen in almost 40 years in November, at +6.8% year on year, according to figures from the Bureau of Labor Statistics – a very far from the 2% target considered as healthy by the Fed for the economy, but slightly below the expectations of analysts who bet on a rise of 7% on an annual basis.

“The Fed was patient in the face of the inflationary surge due to the supply shock, thinking that it was doomed to fade,” remarks Vincent Manuel, Chief Investment Officer at Indosuez Wealth Management. “However, recent indicators suggest that price pressure would continue even if supply recovers, due to robust demand. As previously reported, the latest labor market and inflation data have prompted the Fed to accelerate the reduction of its asset purchases, which should end between February and mid-March 2022.

Note this morning the pleasant surprise concerning the dynamics of industrial production in the Euro Zone, largely beating expectations, with a monthly increase of 2.3% in November, in seasonally adjusted data. The monthly percentage change for October 2021 has been revised from +1.1% to -1.3% in the euro zone, specifies EuroStat.

At midday on the foreign exchange market, the Euro was trading against 1,1370$ about.

We will follow, in addition to the consumer price indices in the United States at 2:30 p.m., crude stocks at 4:30 p.m.

KEY GRAPHIC ELEMENTS

For now, the Euro / Dollar currency pair is still in the path of a wedge (wedge) of wedge consolidation, which is part of a powerfully bearish background momentum. The configuration remains heavy, but we warn against the temptation of an early return to bearish positions, the “risk” of a false exit from the top, in the very short term, being present. We are still waiting for a much better entry point. So beware of action bias, a cognitive bias that sometimes leads to overvaluing decision-making rather than procrastination, inaction or reflection.

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 keep this neutral opinion as long as the Euro Dollar (EURUSD) parity prices are positioned between the support at 1.1216 USD and the resistance at 1.1530 USD.

CHART IN DAILY DATA

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