EUR/USD: In sideband, without range

(News Bulletin 247) – This article, in free access, is produced by the stock market analysis and strategy research team of News Bulletin 247. To not miss any opportunity, consult all the analyzes and discover our portfolios by accessing our Privileges area.

The Euro/Dollar continued its volatile oscillations, in a foreign exchange market which is digesting the half-fig, half-grape content of the federal report on private employment for the month of June.

Published on Friday, the traditional NFP, still closely followed, highlighted job creations in the private sector (excluding agriculture) of around 210,000 units, below the target of 224,000, as well as a stabilization of the rate unemployment to 3.6% of the active population. So much for the “phew of relief”. On the other hand, it should be noted that the dynamics of wages (+0.4% on a monthly basis) exceeded expectations, and should mechanically fuel the debates towards maintaining monetary firmness at the next FOMC. Not enough, therefore, to influence the Fed in its decision to raise Fed Funds by 25 bps at the end of the month. A probable scenario up to 92.4% according to the CME Group’s FedWatch tool.

“US labor markets remain tight and are only slowing down slowly. This slow process of downturn is proving exciting,” for DWS US Economist Christian Scherrmann, who argues: “Sometimes total employment is the weak point, sometimes new hires send signals favorable to inflation.Overall, for now, it looks like labor markets remain too tight for central bankers to relax.Especially since the Fed has already signaled that it would rather be optimistic than let inflation take over. This could mean that the slowdown in labor markets is not enough to alter their plans to raise interest rates, at least one little more.”

Currency traders took notice in the morning of the Sentix index of investor confidence in the Euro Zone, an index which fell more than expected, from -17 to -22.5, the lowest since November 2022.

At midday on the foreign exchange market, the Euro was trading against $1.0960.

KEY GRAPHIC ELEMENTS

The Euro/Dollar currency pair now sees its 20-day moving average (in dark blue) cut upwards against its 50-day counterpart (in orange), which requires us, according to the established trading plan, to cut our positions short, waiting for suitable signals. The form of congestion observed since June 16 lacks frankness, and remains poor in lessons.

MEDIUM TERM FORECAST

In view of the key chart 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 1.0854 USD and the resistance at 1.1000 USD.

CHART IN DAILY DATA