EUR/USD: European inflation on the menu this week

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In a foreign exchange market which is barely getting back into contact with timid benchmarks coming from Wall Street, after the long and festive Thanksgiving weekend, the Euro/Dollar currency pair, one of the most reliable barometers of the appetite for risk in the eyes of fund managers, remained close to high points dating from mid-August, benefiting from confirmation of a slowdown in price increases on both sides of the Atlantic.

Currency traders will also be following with the greatest attention this week the publication of the first estimates of consumer price indices in France, Germany and Italy, and its summary data for the entire Euro Zone.

Christopher Dembik (Pictet AM), however, warns of the return of geopolitical risks, in particular on the aspect of American politics. A return to power for Donald Trump would obviously not be without consequences. “He wants a universal 10% tariff on all products imported into the United States and the elimination over a four-year period of Chinese imports of electronics, steel and pharmaceuticals. For now, financial markets don’t pay much attention to political risk in the United States. But that should change when the campaign officially begins on January 15 in Iowa – the first official stop in the Republican and Democratic primaries.”

On the agenda this Monday, a speech by Ms. Lagarde, President of the ECB at 3:00 p.m. and sales of new homes in the United States at 4:00 p.m.

At midday on the foreign exchange market, the Euro was trading against $1.0950 approximately.

KEY GRAPHIC ELEMENTS

At this stage, an essential observation is necessary. Following the formation of the school marubozu on Tuesday 14/11, the 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 buyer 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