EUR/USD: Imminent crossover of remarkable moving averages

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Yesterday’s publication of the highly anticipated American consumer prices for the month of February will ultimately not have caused a shift in the Dollar, given that the statistics will only have reinforced the hypothesis of a first loosening of the monetary tap for the month of June.

The main statistical event on Tuesday was indeed American inflation in the sense of the CPI (or CPI depending on the language used…). Without destabilizing the market, prices increased slightly more than expected. In particular, excluding food and energy, elements considered volatile, prices increased by 0.4%, compared to 0.3%. Not enough to revolutionize the estimated timetable for lowering federal rates. Over one year, the core index increased by 3.8% after an increase of 3.9% in January. The target (the consensus) was 3.7%.

It should be noted that a very specific element of the publication found a favorable response among investors. “The most important element of this report focused on the ‘housing’ component, which has received a lot of attention over the past month. On this level, the CPI is reassuring and housing should clearly contribute to disinflation over the coming months “, indicates Bastien Drut, head of Strategy and Economic Studies at CPRAM.

“In view of the American presidential elections on November 5, the FED’s action schedule should be limited to a single intervention before the summer. The July 31 meeting is being held between the Republican convention (mid-July) and the Democratic convention (mid-August). In order to remain neutral in the political debate, the FED should no longer act until November”, specifies March 12, 2024″, specifies Thomas Gicquel, Head of bond management, Indosuez Wealth Management.

In the immediate future, currency traders have just become aware of industrial production in the Euro Zone, in a very clear monthly decline in January (-3.2%), significantly below expectations. Compared to January 2023, the decrease is -6.7%, according to the latest EuroStat data.

At midday on the foreign exchange market, the Euro was trading against $1.0930 approximately.

KEY GRAPHIC ELEMENTS

The upward crossing of the 20-day moving average (in dark blue) over its 50-day counterpart (in orange), if it were to happen quickly, would give the signal for the construction of a long position on the pair of currencies. Alerts are scheduled. It is imminent.

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 1.0810 USD and resistance at 1.0940 USD.

DAILY DATA CHART