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The Euro/Dollar, a barometer of risk appetite on financial markets, reacted little this Thursday, remaining stuck on its 20-day moving average (in dark blue), while traders are nervously awaiting the federal NFP (Non Farms Payrolls) report for August. Verdict tomorrow, at 2:30 p.m.
Before this verdict, operators can count on a few foretastes: new job offers yesterday were somewhat disappointing (at their lowest level in 3 and a half years in July), and weekly registrations for unemployment benefits at the moment, stable at 227,000 new units, very close to the target. On the other hand, the survey by the private human resources firm ADP has just put the number of job creations in the private sector at 99,000 (below the symbolic bar of 100,000, therefore). The target, defined by the consensus, was 144,000.
The scenario of a first federal rate cut in two weeks is more than ever the order of the day. It remains to be seen to what extent a 25 basis point cut (the preferred scenario according to the CME Group’s FedWatch tool) could disappoint the fringe of investors who are expecting a cut of a more pronounced magnitude…
Currency traders took note of the final Eurozone PMI data for industry in August on Monday morning. Figures with no significant deviation from the consensus, which confirms the concern surrounding German industry (42.4 points). Let us recall 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.”
Disappointing activity barometers, this time in China, weigh on all risky asset classes, both stocks and commodities. For example, the barrel of light Texas crude (WTI) fell below the $70 mark.
The Euro has, however, shown resistance in the last few hours, with the support of French banking stocks, since the appointment of Michel Barnier to Matignon.
To follow at 4:00 p.m. the activity barometer in ISM services.
At midday on the foreign exchange market, the Euro was trading against $1,1095 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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