EUR/USD: J Powell will not be able to dodge the question of the rate peak this Thursday

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Deprived of major statistical benchmarks since Friday and the publication of a reassuring American employment report, currency traders are in a waiting position before the long-awaited speech by Jerome Powell, the president of the American Federal Reserve, this Thursday during a debate at the International Monetary Fund. Especially since the head of the Fed left investors hungry by dodging the question of terminal rates yesterday, during the opening speech of the Centennial Conference of the Division of Research and Statistics, in Washington DC.

The question/answer game cannot be avoided this Thursday (8:00 p.m.), during a round table entitled “Monetary challenges in a global economy” at the annual Jacques Polak research conference, in Washington DC.

Currency traders are eager to know the feelings of the Fed boss after the encouraging signals of a controlled slowdown in activity: easing of tensions on employment, in particular a halving of job creations over one month, index of PMI activity in services. Because the operators’ compass does not see its needle stabilize: if they are aware that it is still far too early to declare victory over inflation, the question of reaching, or not, the terminal Fed Funds (their high point) is still open.

Several Fed officials and in particular supporters of a strict monetary policy came to instil doubt. Minneapolis Fed President Neel Kashkari said it was premature to declare victory too quickly in the Fed’s battle against inflation. He was followed by another Fed official, Michelle Bowman, who judged that a further rate hike could be necessary to control inflation, if it did not slow down in the coming months.

On the agenda this Thursday, to follow as a priority the weekly registrations for unemployment benefits in the United States at 2:30 p.m. A statistical meeting is to be ticked on the agenda tomorrow (4:00 p.m.): preliminary data from the American consumer confidence index (U-Mich), an indicator with a strong impact in the event of a deviation from the consensus.

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