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Risk appetite remained thwarted by the feeling, shared more and more widely, that the Fed will maintain its federal rates at a high level, for many months, to succeed in taming inflation, which certainly by its dynamic finally reassures, but remains under the pressure of an ultra-tight job market. The Euro, one of the most reliable barometers of this appetite for risk in the financial markets, continued to decline near $1.0890.
“His line of sight [celle de la Fed, ndlr] has always remained the same, but investors were already anticipating the pivot… until Wednesday!” quips Romane Ballin, bond manager at Auris Gestion. in this week of August 15, weak in economic data. And the few figures published last week reinforced this concern since US retail sales rose more than expected, which underlines the resilience of household consumption, and the unemployment registration figures reflect a job market. which remains tense.”
The concrete consequences of the tone and tenor of the debates transcribed in the Minutes of the last FOMC (July) caused the yields of US 10-year Treasuries, the 10-year Treasuries, to soar to a level that had no longer been dated. news since 2007.
A context on rates that reinforces the attention that the market will pay to the Jackson Hole symposium, a sort of large conference of central bankers organized by the Federal Reserve (Fed), at the end of the week in Wyoming. The speech of its president, Jerome Powell, will be harshly scrutinized, and the least of his elements of language interpreted…
No significant statistical figure, capable of shifting the course in any case, was on the agenda yesterday. Agenda which densifies this Tuesday with the sales of old residences and the manufacturing index of the Richmond Fed, simultaneously at 4:00 p.m. Tomorrow will be published the first estimates of the PMI activity indicators. The German industrial component, to be watched like milk on the stove, is expected at a sad 38.6 in the sense of the market consensus.
At midday on the foreign exchange market, the Euro was trading against $1.0890 approximately.
KEY GRAPHIC ELEMENTS
The near total retracement of July’s gains does not militate at this stage for a continuation of the advance of the currency pair, without formally ruling it out. This retracement, by its magnitude, weakens the bullish message then delivered over a good part of July. The outcome of the ongoing test of the 50-day moving average (in orange) will be decisive. The bearish message takes shape with the break – now validated – of the 50-day moving average by its 20-day counterpart (in dark blue), at a significant angle.
MEDIUM TERM FORECAST
In view of the key graphic factors that we have mentioned, our opinion is negative in the medium term on the Euro Dollar (EURUSD) parity.
Our entry point is at 1.0887 USD. The price target of our bearish scenario is at 1.0693 USD. To preserve the capital invested, we advise you to position a protective stop at 1.0991 USD.
The expected return of this Forex strategy is 194 pips and the risk of loss is 104 pips.
The News Bulletin 247 board
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