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With the announcement, this time formulated, of new support measures in China, the Euro, barometer of risk appetite on the financial markets, was well oriented on Tuesday, not far from its annual peaks against the Dollar, close to $1.1140.
“The noise from sources “close to the discussions” has been intensifying since the start of the school year, suggesting the imminence of measures in the face of a slowing Chinese domestic economy,” notes Alexandre Baradez (IG France), who praises major announcements, “the lowering of the prudential reserve ratio for Chinese banks”, “the lowering of a short-term lending rate to banks (7 days)”, support for the stock markets and real estate.
“Even if it is not a “bazooka”, the measures taken by the Chinese authorities are relevant and targeted in relation to the difficulties that the country has been facing for several years.”
The MSCI China index jumped 4.45%.
In the statistical chapter, deprived of a sharp macroeconomic benchmark on Friday, operators made up for it on Monday with the preliminary data of 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 signifies 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 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.”
In the immediate future, the main meeting of the morning for foreign exchange traders concerned Germany, whose industry is causing concern. The IFO index of the business climate in the leading economic power of the Eurozone came out down at 85.4, without however moving significantly away from the consensus (86.1).
In the United States, the S&P Case Schiller index of real estate prices in 20 representative metropolitan areas at 3:00 p.m., the consumer confidence index (Conference Board) and the Richmond Fed manufacturing index at 4:00 p.m.
At midday on the foreign exchange market, the Euro was trading against $1,1140 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
DAILY DATA CHART
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