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The Euro/Dollar remained restrained late Wednesday morning, close to a bearish oblique crossed energetically on May 5 in the wake of inflation figures (retail prices) across the Atlantic considered reassuring. Traders will have the opportunity to learn more about the Fed’s intentions in the coming months, or at least be able to speculate on its intentions, after the publication this evening (8:00 p.m. Paris time) of the latest FOMC Minutes. .
As a reminder, excluding food and energy, these consumer prices increased across the Atlantic in April by 0.3%, moderately therefore, and in line with the target. Over one year, these prices increased by 3.6%, compared to 3.8% the previous month.
However, two Fed executives, Michael Barr, vice-president of the Federal Reserve in charge of banking regulation, and Philip Jefferson, another vice-president of the Fed, insisted that a restrictive monetary policy should remain the norm. a long time to go for a truly effective fight against inflation. A normalization of the job market, still under strong tension, is particularly necessary.
“After short-term observations, we can however consider that the progress made in recent months has been made with difficulty. In 8 months, underlying inflation (CPI core) has only slowed by 0.5%. And “this echoes the numerous declarations of members of the Fed, including those of its president, highlighting the lack of significant progress in recent months”, Alexandre Baradez (IG France) wanted to qualify after this key publication.
“We could therefore begin to think that the American economy needs to slow down a little more for the Fed to be convinced that inflation is indeed returning, and in a sustainable manner, towards the 2% objective, and thus proceeds to its first rate cut.”
Not much to get your teeth into on Tuesday in terms of statistics, apart from the positive monthly balance of the trade balance in the Euro Zone (+17.3 billion euros, below expectations). We will have to wait until this Wednesday for the calendar to thicken somewhat, with sales of old homes across the Atlantic (4:00 p.m.), but especially Thursday with PMI activity indicators in the Euro Zone and the closely monitored weekly registrations for unemployment benefits.
At midday on the foreign exchange market, the Euro was trading against $1.0850 approximately.
KEY GRAPHIC ELEMENTS
On large-scale marubozu, the currency pair shattered the technical resistance level constituted by the bearish oblique drawn in black. A recovery is underway, which may ultimately result in a pullback. The conditions in terms of entry point are not met to immediately build a position on the currency pair.
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 1.0758 USD and resistance at 1.0885 USD.
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