EUR/USD: The currency pair is on a crest line

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The Euro, one of the benchmark barometers of risk appetite on financial markets, remained shaky against the Dollar, with currency traders remaining upset by E Macron’s decision to call new legislative elections. The market fears that populist groups, such as the National Rally, will implement policies that would weaken France’s already shaky public finances.

“At this stage, investors are immersed in uncertainty. It must be said that none of the possible scenarios currently seems favorable to the financial markets. Indeed, while the trend in French public finances was already not particularly bright, the “The prospect of particularly wasteful programs at both extremes raises fears of the worst for French debt”, explains Thomas Giudici, head of bond management at Auris Gestion.

In terms of statistics on Wednesday, there was nothing substantial to get your teeth into. Let us cite the NAHB index of American residential real estate which narrowly missed the consensus. To follow at 2:30 p.m. the new weekly registrations for unemployment benefits across the Atlantic and especially tomorrow a battery of barometer indicators of PMI activity (surveys of purchasing directors).

In Switzerland, the Swiss National Bank (SNB) has decided to lower its rates for a second time since the start of the year, bringing its main key rate to 1.25%.

This measure was “probably more influenced by the appreciation of the franc over the last two months than by a perceived easing of domestic inflationary pressures”, underlines Capital Economics. “In our opinion, it is unlikely that the SNB will reduce its rates further this year, because domestic demand is already starting to recover and inflation will remain at its current level,” adds the think tank.

Status quo, however, on Bank of England (BoE) rates at 5.25%.

At midday on the foreign exchange market, the Euro was trading against $1.0725 approximately.

KEY GRAPHIC ELEMENTS

The currency pair recorded a double top at $1.0885 which further asserts itself as a resistance level, below which the bearish bias can regain its rights. Especially in the event of rapid reintegration of the lower part to an oblique (drawn in black), a major graphic reference point. This test is underway, in conditions of volatility that are challenging. Negative review maintained.

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 1.0550 USD and resistance at 1.0758 USD.

DAILY DATA CHART