EUR/USD: Little change after the Minutes, the Euro consolidates its advance

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The Euro wisely continued its horizontal consolidation against the Dollar, the appetite for risk having not been affected by the Fed Minutes, published last night. The traditional minutes of the last monetary policy meeting of the powerful monetary institution highlighted the great caution of its members, suggesting that key rates would remain high for a long period. Hence an unchanged market psychology on foreign exchange, with currency traders favoring a return to the forefront of the most “risky” currencies, since the confirmation of a very marked slowdown in American inflation.

Currency traders seem to believe in the ideal “Goldilocks” type scenario, “that tale popularized by the Brothers Grimm in the 18th century,” as Christopher Dembik, investment strategy advisor at Pictet AM, explains. “In its most widespread version, a young girl with blond hair (“Goldilocks”) enters a house inhabited by a family of three bears who have gone away. She then tastes the three bowls of porridge, preferring the one of the bear, neither too hot like that of the father, nor too cold like that of the mother. In economics, the “goldilocks” scenario refers to an optimal situation where growth is modest, but very real, and moderate inflation. This is now the scenario that dominates the financial markets after the publication of inflation in the United States.”

Austan Goolsbee, the president of the Chicago Fed, even speaks of an “unusual feat” for the American economy with a record drop in inflation (excluding war periods) without a recession.

The macroeconomic agenda finally includes this Wednesday, across the Atlantic, orders for durable goods and weekly registrations for unemployment benefits at 2:30 p.m., as well as revised data from the consumer confidence index (U-Mich) at 4:00 p.m.

At midday on the foreign exchange market, the Euro was trading against $1.0900 approximately.

KEY GRAPHIC ELEMENTS

At this stage, an essential observation is necessary. Following the training of marubozu school Tuesday 14/11, spot built an extremely short consolidation, pennant on the upper part of the candle mentioned, before rising early, proof of the bubbling impatience of the buying camp.

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 1.0822 USD and resistance at 1.1012 USD.

DAILY DATA CHART