EUR/USD: US Q1 GDP and PCE price, two major meetings for currency traders

(News Bulletin 247) – This article, with open access, is produced by the stock market analysis and strategy research team at News Bulletin 247. To ensure you don’t miss any opportunities, consult all the analyzes and discover our portfolios by accessing our Privileges area.

HAS

The Dollar continued to maintain a small advantage against the Euro in the context of the rise in 10-year federal rates.

“In January, financial markets anticipated a cut in the key rate of 170 basis points by the end of the year, or almost seven rate cuts. Today, fewer than two cuts are planned. Bond rates 10-year bonds reached their level of last November by climbing 85 basis points to 4.6%, and the stock markets have lost almost 4% since the announcement of the latest inflation figures”, summarizes Hervé Thiard, Managing Director of Pictet Asset Management.

The estimate of the trajectory of federal rates has been turned upside down in the space of a few months. And the PCE prices, the Fed’s preferred barometer in its assessment of price dynamics, which will be published on Friday, will make it possible to further adjust this estimate.

“These market movements were exacerbated by the Fed chairman who indicated that the “lack of further progress” on inflation meant that rate cuts would be delayed, marking his second change of course in four months , after that of December which signaled the start of a cycle of monetary easing. The revision of market expectations and the pivot on the pivot of the Fed now seem more aligned with American economic reality.

Consumer confidence remains high, and we will be able to get a concrete glimpse of this tomorrow with the very first estimates of US GDP for the first quarter.

This article, with open access, is produced by the stock market analysis and strategy research team at News Bulletin 247. To ensure you don’t miss any opportunities, consult all the analyzes and discover our portfolios by accessing our Privileges area.

The Dollar continued to maintain a small advantage against the Euro in the context of the rise in 10-year federal rates. The 10-year Treasuries consolidated without falling, towards 4.65, as the most important macroeconomic statistics of the week approached.

“In January, financial markets anticipated a cut in the key rate of 170 basis points by the end of the year, or almost seven rate cuts. Today, fewer than two cuts are planned. Bond rates 10-year bonds reached their level of last November by climbing 85 basis points to 4.6%, and the stock markets have lost almost 4% since the announcement of the latest inflation figures”, summarizes Hervé Thiard, Managing Director of Pictet Asset Management.

The estimate of the trajectory of federal rates has been turned upside down in the space of a few months. And the PCE prices, the Fed’s preferred barometer in its assessment of price dynamics, which will be published on Friday, will make it possible to further adjust this estimate. They are expected in core data, a monthly increase of 0.3%.

“These market movements were exacerbated by the Fed chairman who indicated that the “lack of further progress” on inflation meant that rate cuts would be delayed, marking his second change of course in four months , after that of December which signaled the start of a cycle of monetary easing. The revision of market expectations and the pivot on the pivot of the Fed now seem more aligned with American economic reality.

Consumer confidence remains high, and we will be able to get a concrete overview this Thursday (2:30 p.m.) with the very first estimates of American GDP in the first quarter. The creation of wealth in the world’s largest economy is expected to increase by 3% at an annualized rate.

Note yesterday the publication of the IFO business climate index in Germany, up slightly to 89.4, above the target formed by the expectations of the financial community.

At midday on the foreign exchange market, the Euro was trading against $1.0720 approximately.

KEY GRAPHIC ELEMENTS

THE pullback very clear Thursday 04/18 on a resistance zone ($1.0693) will invite people to take short positions again on the EURUSD currency pair, especially as the break of the 50-day moving average (in orange) by its counterpart at 20 days (in dark blue) was made at a relatively large angle.

FORECAST

Considering the key graphical factors that we have mentioned, our opinion is negative on the Euro Dollar (EURUSD).

DAILY DATA CHART