EUR/USD: GDP and PCE on the menu

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The single currency was enjoying a calm consolidation against the greenback, while currency traders will have to deal with a very busy macroeconomic program this week, not necessarily in quantity but in “quality”: the week’s agenda includes indicators to strong potential impact in the event of a deviation from the consensus. Kick-off yesterday with, at 4:00 p.m. (Paris time), the consumer confidence index (Conference Board). An indicator with a strong impact, in an economy where traditionally, the creation of national wealth is very dependent on the quality of domestic consumption. It came out slightly higher, exceeding expectations, at 102.

Continuation of the “festivities” this Wednesday with American GDP data, preliminary data on consumer prices in November in the Euro Zone on Thursday, as well as PCE prices, the Fed’s preferred measure in its assessment of price dynamics. Enough to gauge even more precisely the credibility of a Goldilocks type scenario, an ideal scenario where measured and controlled inflation would coexist with weak but continuous growth.

The market also remained attentive to the interventions of members of the American Federal Reserve (Fed) which will hold its next monetary policy meeting on December 12 and 13.

Governor Christopher Waller said he was “increasingly confident” that the current level of the central bank’s key rates could allow inflation to return to around 2%, according to comments reported by CNBC. The president of the Chicago Fed, Austan Golsbee, simply judged that inflation was falling without falling within the target desired by the American institution, reports Bloomberg.

In the immediate future, it is still a Goldilocks type scenario which is favored by currency traders.

“In economics, the “Goldilocks” scenario refers to an optimal situation where growth is modest, but very real, and inflation is moderate,” recalls Christopher Dembik, investment strategy advisor at Pictet AM.

The term is borrowed from a character in a popular tale, Goldilocks and the Three Bears, where a little girl discovers an empty house in the heart of the forest. Attracted by the tempting smell of bowls of hot chocolate (or porridge, depending on the version!), the little girl indulges in tasting the 3 bowls lined up on the table: that of Mama Bear, Papa Bear, and the little one. bear cub. His preference is for the latter, neither too hot nor too cold…

“It is now this scenario that dominates the financial markets after the publication of inflation in the United States,” continues M Dembik. “In terms of monetary policy, this has two consequences: 1) the terminal rate has certainly been reached in the United States; 2) a rate cut may be on the cards. The money market forecasts a first decline in May 2024 compared to June 2024 just a few days ago.”

To follow the preliminary Q3 GDP data in the United States at 2:30 p.m.

At midday on the foreign exchange market, the Euro was trading against $1.0975 approximately.

KEY GRAPHIC ELEMENTS

At this stage, an essential observation is necessary. Following the training of marubozu school 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 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 1.0929 USD and resistance at 1.1012 USD.

DAILY DATA CHART