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The Euro/Dollar currency pair continued its consolidation movement, close to its 20-day moving average (in dark blue), in the absence of any reference from Wall Street on Monday, closed due to a public holiday (Labor Day). Currency traders took note this morning of the final PMI data in the Eurozone for industry in August. Figures without significant deviation from the consensus, which confirms the concern around German industry (42.4 points). Remember that below 50, the PMI score reflects a contraction.
“Germany is today the black spot of the European continent due to its very industrial positioning,” notes Emmanuel Auboyneau, AMPLEGEST Associate Manager.
“The rebound in tourism is benefiting countries like France, Spain and Italy more. European inflation has remained moderate throughout the summer and is now approaching the European Central Bank’s target. The recent wage moderation is reassuring in this respect. Everything therefore indicates that the European monetary institution will continue its rate cut cycle that began in July.”
On Friday, inflation figures focused the attention of traders. In the United States, the PCE index, the American Federal Reserve’s preferred gauge for measuring price increases, rose 2.6% in July over a year compared with a 2.7% increase expected by economists surveyed by the Wall Street Journal.
In the eurozone, inflation has slowed. It stood at 2.2% in August compared to 2.6% in July. This also validates the theory of a new rate cut by the European Central Bank in September. The governor of the Bank of France, François Villeroy de Galhau, also judged this Friday that it would be “fair and wise” for the institution to lower its rates in September, according to comments relayed by the Reuters agency.
“August unemployment, due this Friday, will be one of the last major US statistics before the Fed’s FOMC meeting on September 17-18. There has been a lot of talk over the past month about the downward revision to job creation for the year ending March 2024 (-818,000),” notes Christopher Dembik, investment strategy advisor at Pictet AM.
In the meantime, from tomorrow, traders will be paying attention to the reopening of Wall Street of course, but also to the publication of the ISM industrial PMI, expected to rise slightly to 47.5.
At midday on the foreign exchange market, the Euro was trading against $1,1070 approximately.
KEY GRAPHIC ELEMENTS
In contact with its 20-day moving average (in dark blue), the EURUSD spot is completing a breathing phase, within an upward trend which is measured by the growing gap between the aforementioned moving average and its 50-day counterpart (in orange).
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 1.1012 USD and the resistance at 1.1134 USD.
The News Bulletin 247 council
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