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There was also hesitation on the exchange rates, where the Euro/Dollar currency pair did not adopt a directional trend, while maintaining significant volatility, after the Fed’s decision last Wednesday to ease its monetary policy in a first muscular step, with a 50 basis point drop in the remuneration of its Fed Funds.
This decision was accompanied by new economic projections: the powerful monetary institution headed by J Powell revised upwards its unemployment forecasts to 4.4% for the current year and the next, and downwards its inflation forecasts for 2025 to 2.1%.
“This decision reflects our growing confidence that with an appropriate recalibration of our policy stance, labor market strength can be maintained in a context of moderate growth and inflation falling sustainably to 2 percent,” he also said at a news conference following the rate decision. The central banker warned that no trajectory is set in stone at this stage. “We can accelerate if warranted, slow down, pause” in the monetary easing cycle, depending on economic data.
Deprived of a sharp macroeconomic benchmark on Friday, traders are making up for it this Monday with the preliminary data from the PMI activity indicators in the Eurozone, which missed all their expectations, with a “red card” for German industry, at 40.3 points. Let us recall that a score below 50 means a contraction in the sector considered. On the scale of the entire monetary union, the industrial score for the current month is 44.8 (consensus at 45.7) and the services score is 50.5 (consensus of 52.3).
Dr. Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank, commented: “The fragility of the industrial economy is reflected in the level of employment, with manufacturing employment recording its sharpest decline since August 2020. At the same time, employment growth slowed for a fourth consecutive month in the services sector, and was close to stagnation. Official employment figures, which have remained stable so far, are likely to deteriorate in the coming months, but probably less sharply than in previous recessions, thanks to current demographic trends.”
Similar advanced activity indicators to follow at 4:00 p.m.
At midday on the foreign exchange market, the Euro was trading against $1,1110 approximately.
KEY GRAPHIC ELEMENTS
The spot has once again weakened an oblique line of graphic support, relaunching the idea of ​​the formation of a chart pattern. A clear break of this threshold would weaken the currency pair for the coming weeks. A neutral position is adopted while waiting, if necessary, for a signal.
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 1.1250 USD.
The News Bulletin 247 council
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