EUR/USD: Relief over health of US economy

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The Dollar suffered a little less against the Euro in this very last part of the week, thanks to a battery of economic statistics justifying an initial reduction of 25 basis points, and not 50 basis points, in federal rates at the end of the next FOMC next month.

And this after a stronger-than-expected increase in retail sales in the United States last month. The American consumer barometer rose by 1% over one month in July, exploding the consensus which was counting on a much more modest increase, of +0.2%. In June, retail sales had fallen by 0.2%. On the American employment side which had been very worrying in recent weeks, the lights are also green. Applications for unemployment benefits fell more than expected, to 227,000 the previous week, which is well below the 235,000 applications expected by the consensus cited by Dow Jones. As for the monthly federal employment report, although missing expectations, it hardly strays far from the consensus, whether in terms of the volume of production or that of the rate of utilization of productive capacities.

At 2:30 p.m., the housing starts and building permits in the United States will be followed. And at 4:00 p.m., the consumer confidence index (U-Mich), expected in preliminary data at 66.7.

On this side, one figure explained the good performance of the Euro in this consolidation movement: it is the monthly surplus of the trade balance, at 17.5 billion euros in June, against 12.4 billion euros in May.

At midday on the foreign exchange market, the Euro was trading against $1,0990 approximately.

KEY GRAPHIC ELEMENTS

The end of the short consolidation on the Euro / Dollar (August 06 – 09) was classically followed by a rise in increasing volatility, giving more credit to the support role of the 20-day moving average (in dark blue). In the immediate future, a continuation of the consolidation movement is expected.

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.

DAILY DATA CHART