EUR/USD: The big money makers will remain determined

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The Euro/Dollar regained a few pips, in a climate of strong risk appetite ahead of the last meetings of the main central banks this year.

“Everyone would like them to give indications on the direction of monetary policy in 2024. It’s too early,” according to Christopher Dembik, investment strategy advisor at Pictet AM. “In the best case scenario, they should welcome the drop in inflation which makes it possible to envisage a possible pivot next year. We will therefore have to be patient to know when the first rate cuts will take place and above all how extensive will the monetary easing process be?

The Fed concludes its FOMC tomorrow and the ECB its Governing Council on Thursday.

Xiao Cui, senior economist at Pictet Wealth Management, expects “the committee to maintain a gentle guidance for tightening in case inflation reaccelerates, even if [il pense] that officials privately believe that policy is now sufficiently restrictive and that the Fed is done raising rates. During the press conference, [M Cui s’attend] “Chair Powell is pushing back against market expectations for earlier and faster rate cuts.”

Konstantin VEIT, portfolio manager at PIMCO, remains “skeptical that the ECB will make rate cuts as quickly as the market expects, as the outlook for underlying inflation remains uncertain. [Et ne s’attend pas] “that the ECB radically changes its reinvestment guidelines at the December meeting.”

Immediately and while awaiting the publication of the American CPI, currency traders have just become aware of the ZEW confidence index in the Euro Zone’s leading economy, at 12.8 points, beyond expectations.

“Despite the current budget crisis, Germany’s assessment of the situation and economic expectations have improved slightly again. This is due to the fact that the share of respondents expecting a fall in interest rates share of the ECB in the medium term has doubled. This is good news for the German construction sector, for which we see significantly more optimistic expectations this month. Likewise, the share of respondents expecting a further decline in inflation rates is falling”, comments ZEW President Professor Achim Wambach on the survey results.

Investors are especially awaiting the publication at 2:30 p.m. of the consumer price index (CPI) in the United States, which measures inflation.

At midday on the foreign exchange market, the Euro was trading against $1.08 approximately.

KEY GRAPHIC ELEMENTS

Since November 29, the Euro/Dollar has almost completely retraced the gains made from November 14 to 28, but with no indication of an imminent restart. The opinion will remain neutral above the low points of the candle in marubozu blank of November 14.

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 1.0693 USD and resistance at 1.1012 USD.

DAILY DATA CHART