EUR/USD: J Powell goes to parliamentary grill

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The Pair of Euro Dollar currencies remained under pressure as the first part of the parliamentary hearings of J Powell, president of the Fed.

“All the interventions of the President of the Federal Reserve are monitored but it is a particular character. It occurs a few weeks after the inauguration of Donald Trump and in a context where the Fed has taken a break on the rate drops due to The absence of new progress on the inflation front, “notes Alexandre Baradez (IG France).

And it is not the NFP (Private Employment Report) published on Friday which will give Dovish arguments to the Fed executives. As a reminder, this report is rather solid, because if the creations of posts (excluding agriculture) stand out at 143,000, a little below expectations, the increase in average hourly wages (+0.5%) challenges, especially since The target defined by consensus was +0.3%. Finally, the unemployment rate, expected stable to 4.1% of the active population, drops to 4.0%.

It is therefore with a very special vigilance that the traders will gauge consumer prices (ICC) which will be published tomorrow, at 2:30 p.m.

“In the context of strong commercial uncertainty, Jerome Powell should not change his rifle in front of the senators, he will probably plead patience before new rate drops, waiting to see more clearly concerning the effects on prices and The use of new policies implemented by the Trump administration. “

As a reminder, the markets are indeed starting the week on a new salvo by Donald Trump in the field of customs duties. The American president said on Sunday, February 9, that he planned to set up additional customs duties of 25% on all imports of steel and aluminum in the United States. “

At midday on the foreign exchange market, the euro was treated against $ 1,0315 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 buyer of protest can then 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 1,0316 USD. The price of course in our lowering scenario is 1,0001 USD. To preserve the committed capital, we advise you to position a protection stop at 1,0449 USD.

The profitability hope of this Forex strategy is 315 pips and the risk of loss stood at 133 pips.

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