EUR/USD: Navigates according to the American 10-year

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Like the main European stock markets, Paris, Frankfurt and Milan, although with a certain lag, the Euro returned to “consolidation mode” against the Dollar, in a first part of the week relatively poor in macroeconomic statistics. The currency pair remains particularly sensitive to the American 10-year, whose sudden decline caused by the publication of the employment report on Friday, had relieved all risky asset classes.

We will note, from this NFP report, a slight increase in the unemployment rate to 3.9% of the active population and above all, a fall by half in job creation in the non-agricultural private sector. Enough to reinforce the idea that the terminal rates may already have been reached…

“Even if this has the likely consequence of ending the central bank rate hike cycle, this does not mean that the Fed and the ECB will “pivot” quickly and the debate on the first rate cuts should take several months to finalize. open up, the famous “higher for longer.””, analyzes Alexandre Baradez (IG France) with hindsight.

In terms of statistics on Monday, there were no surprises on the final data for the PMI activity indicator in services in final data for October, at 47.8 points for the entire Euro Zone. Remember that a score below the 50 point mark means a contraction of the sector in question, by construction. Note also that the Sentix investor confidence index, although still clearly in negative territory (-18.6), came out above the target. The institute insists on the German contribution to the final score. Published this morning, the producer price index in the Euro Zone came out perfectly on target. This afternoon, currency traders will monitor the level of the US trade balance deficit in September.

At midday on the foreign exchange market, the Euro was trading against $1.0680 approximately.

KEY GRAPHIC ELEMENTS

The 20-day moving average (in dark blue) is in phase, at a significant angle, to reconquer the 50-day long moving average (in orange), even though these two trend lines have not met since the August 17. The bearish message is therefore no longer so clear. The neutral opinion will be kept immediately.

MEDIUM TERM FORECAST

Considering the key graphical 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 Euro Dollar (EURUSD) prices are positioned between support at 1.0550 USD and resistance at 1.0792 USD.

DAILY DATA CHART