EUR/USD: Governors hold advice …

(BFM Stock Exchange) – This article, with free access, is produced by the research team in BFM Stock Exchange analysis and market strategy. To not miss any opportunity, consult all of the analyzes and discover our portfolios by accessing our privilege space.

In the aftermath of the first FED FOMC, and as the BCE Governors of the Year’s BCE approaches, market psychology remained identical on the pair of Euro / dollar currencies, largely favorable to the second component, to the Large dam of D Trump, who will increase his pressure, doubt no, on J Powell for a monetary relaxation. However, the strength of employment, the inflationary program of the new tenant of the White House and in general the insolent resilience of the first economy of the world militates at least for a monetary break.

It is, moreover, it was highly expected – what the Federal Reserve chose yesterday by maintaining the remuneration of its Fed Funds. “In the United States […]the economy continues to grow and Donald Trump’s projects aimed at softening tax policy, imposing high customs tariffs and strongly limiting immigration should have an inflationary effect. While the ECB is slowly moving towards the last stages of its monetary softening, the Fed has already crossed the finish line, “says Dr. Felix Schmidt, senior Economist at Berenberg.

The ECB follows suit this Thursday at the Fed, and the virtual concomitance of these two monetary events will be an opportunity to take the measure of the dichotomy between the two strategies. “The ECB should make a new drop in rates at the January 30 meeting, thus accentuating decorrelation with American policy,” abounds Emmanuel Auboyneau, associate manager at Amplegest. “Sweat growth in Europe and large -part inflation justify a more conciliatory monetary policy. Christine Lagarde should however display a prudent tone, in the continuity of her previous speeches. The lack of audacity of the ECB seems in effect inscribed in the DNA of the institution. “

Patrick Barbe, head of bond investment Investment grade in Europe at Neuberger Berman, expects “ECB to provide more information on his confidence in the fact that inflation in the euro zone will fall around 2 % of Here the middle of the year. objective) and Italy (below its objective) and what is its update of the prospects for household consumption, knowing that households have spared a large part of the increase in their wages in an uncertain context and a rise unemployment in northern Europe. “

Reminder of the meetings not to be missed: the decision of monetary policy proper at 2:15 p.m. and especially the institution’s press conference at 2:45 p.m. To follow also, on the macroeconomic front this time, the weekly registrations for unemployment benefits at 2:30 p.m. Posted in the morning, the unemployment rate in the euro zone remained unchanged, at 6.3% of the active population; On the other hand, the German T4 GDP dropped (-0.2%) more than anticipated (-0.1%).

At midday on the foreign exchange market, the euro was treated against $ 1,0410 approximately.

Key graphics elements

The continuous 50 -day (in orange) mobile average constitutes a solid technical and graphic barrier. In the shorter term, it is even his counterpart at 20 days (in dark blue) that officiates as a dynamic resistance. And this without the RSI oscillator positioning itself in the occurrence zone. In the immediate future, the pair of currencies traces, in the upper part of the Bollinger bands, a negative structure in harami. Once the parity is perfect, namely $ 1 for a €, an energetic purchase of protest can be set up.

Medium term

In view of the key graphic factors that we have mentioned, our opinion is negative in the medium term on Euro dollar parity (Eurusd).

Our entry point is 1,0402 USD. The price of course in our lowering scenario is 1,0001 USD. To preserve the committed capital, we advise you to position a USD 1,0609 protection stop.

The profitability hope of this Forex strategy is 401 pips and the risk of loss is 207 pips.

Daily data graphics