EUR/USD: A dense statistical program

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Firm but without direction, the Euro / Dollar remained close to its annual highs, with traders now trying to gauge the scope of the new package of Chinese measures to revive consumption. As a reminder, Beijing has just announced a set of measures to support the economy, particularly in a sensitive area of ​​its activity: real estate.

“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.”

For many months, the market has been waiting for the Chinese government to deploy major resources to revive a flagging economy. The latest indicators published last week, whether retail sales or industrial production, have once again confirmed that the Chinese economy is slowing down.

“The next wave of easing will likely come from fiscal and housing policy, which could change growth expectations and market sentiment, depending on the magnitude and effectiveness of the announcements,” economists at Allianz Global Investors said.

Because in the immediate future, “despite this latest initiative on the part of the Chinese authorities, investors remain skeptical,” tempers Grégoire KOUNOWSKI, Investment Advisor at Norman K. “Indeed, for many of them, the country’s economic problems remain deep, with a property market running out of steam, domestic consumption falling, rising youth unemployment, a return to price deflation and distrust of foreign investors stronger than ever.”

In terms of statistics, there was little to sink our teeth into on Wednesday; it is true that operators are already waiting for the publication of PCE prices on Friday, the Fed’s preferred measure in its assessment of inflation. Let us nevertheless mention new home sales, which happily crossed the 700,000 mark in August, beating the target.

This Thursday, the main focus across the Atlantic will be the quarterly GDP and weekly unemployment benefit registrations at 2:30 p.m., as well as a speech by J Powell, Chairman of the Fed at 3:20 p.m., at the opening of the US Treasury Market Conference in New York.

In addition to PCE prices, the statistical menu will be rich tomorrow with household income and expenditure, as well as the consumer confidence index (U-Mich).

At midday on the foreign exchange market, the Euro was trading against $1,1150 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.

DAILY DATA CHART