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With a Euro favored, as a barometer of risk appetite, by the breathtaking publication of NVidia, and a Dollar held by the outlook, reinforced after the Minutes, of the highly profitable Fed Fund for a long time to come, the currency pair continued its consolidation movement above a bearish oblique of support.
The graphics processor specialist delivered its first quarter results as well as its forecasts for the current quarter, shattering analysts’ estimates.
The group revealed revenues of $26 billion, compared to $7.19 billion in revenues generated during the same period last year. The increase is therefore dizzying, since its sales have simply tripled over one year.
“It is not uncommon to have one company or a handful of them exercising market dominance in the early stages of an industrial revolution,” analyzes Christopher Dembik, investment strategy advisor at Pictet Asset Management.
“This is precisely what we are currently witnessing with artificial intelligence. In the immediate future, we do not see which player could weaken Nvidia’s foundation, especially after its recent partnership with Dell Technologies which should allow the group to move on to the second phase of the AI revolution, that of democratization.”
On the American monetary policy side, The Minutes showed that J Powell ruled out the idea of a final increase in Fed Funds, but that certain members of the Board did not forbid it. A cold realism even though the last publication of retail prices had shown a significant improvement in the situation.
“After several months of upward surprises, American inflation finally stalled in April and even slightly surprised the downward consensus,” notes Thomas Giuduci, head of bond management at Auris Gestion. “These figures confirm that the disinflation movement is not dead but, once again, we will have to be patient to return to levels more in line with the expectations of central banks. While this publication is naturally good news, the target of 2% nevertheless still seems a long way off, with American inflation having been above 3% for more than 3 years now. In the eyes of the market, the worst, namely a rebound in inflation, seems. have been avoided.”
To be followed on the agenda this Thursday are the weekly registrations for unemployment benefits, the gauge of which is an excellent indicator of the state of tensions on employment across the Atlantic, tensions themselves generating inflation through wages.
In the meantime, currency traders have taken note of the first estimates of the barometer indicators of PMI activity, in services and in industry. On the scale of the entire Euro Zone for the month of May, it is the increase in industry that is the most pleasant surprise, at 47.4. Note that the score, still significantly below 50 points, suggests a contraction in the sector. In services, the score is in line with expectations, at 53.3, stable compared to the final data for April.
Dr. Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank, provided the following insights:
“German economic performance surpasses that of France, thanks to strong growth in the services sector, which is contracting in France. If the French manufacturing sector is doing better than its German counterpart, it However, it also fails to emerge from the recession. Although it is often tempting to compare the economic performances of various countries, and to highlight possible strengths or weaknesses, it is reassuring to note that the two main economies. of the region are generally in phase. France therefore has a good chance of catching up in the services sector, which would allow growth in the euro zone to get back on a more solid footing.”
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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