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The Euro/Dollar currency pair consolidated its violent rise that began at the end of last week, amid fears that the world’s largest economy would enter a recession.
Everything accelerated on Thursday, with the publication of an activity indicator (ISM manufacturing), two points below expectations that were themselves pessimistic, and on Thursday, with a report on employment that was particularly disappointing, notably on the job creation front, and the surprise rise in unemployment, to 4.3% of the active population.
However, the weekly unemployment benefit registrations, published yesterday, provided a welcome boost to the greenback. They came out at 233,000 new units, against a consensus of 241,000, and a previous week at 250,000.
However, we should not cry victory too quickly, warns Florian Ielpo, head of macroeconomic research at Lombard Odier IM: “It is difficult to read a significant message in these data. This latest figure remains consistent with the recent upward trend in allocation requests: the enigma of the Sahm rule therefore remains unsolved.”
The Sahm rule links the unemployment rate to the risk of recession in the United States. It assumes that the U.S. economy is entering a recession when the average of the last three months of the unemployment rate is 0.5 percentage points (50 basis points) or more higher than its lowest level in the last twelve months.
The economic trajectory of the United States, through the macroeconomic publications of the coming weeks, will constitute the essential working matrix for the currency pair that interests us here. This Friday, no major figures appear on the agenda, an agenda that will become denser next week with producer prices on Tuesday, consumer prices on Wednesday, retail sales on Thursday, and consumer confidence (U-Mich) on Friday.
At midday on the foreign exchange market, the Euro was trading against $1,0920 approximately.
KEY GRAPHIC ELEMENTS
Our short positions are immediately stopped on the EURUSD currency pair, with the volatility that exploded on Friday. We remain waiting for clear signals allowing us to glimpse a new sustainable directional, before exposing ourselves again.
MEDIUM TERM FORECAST
Considering the key graphic factors that we have mentioned, our opinion is neutral in the medium term on the Euro Dollar (EURUSD) parity.
We will maintain this neutral opinion as long as the Euro Dollar (EURUSD) parity rates are positioned between the support at 1.0906 USD and the resistance at 1.1012 USD.
The News Bulletin 247 council
DAILY DATA CHART
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