EUR/USD: The matrix is ​​as much geopolitical as macroeconomic

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The Pair of Euro / Dollar currencies remained fragile by its configuration, in a geopolitical context to say the least tormented, and while the robberies never stop dissecting American macroeconomic statistics missing expectations.

Friday, the meeting at the White House between Donald Trump and his Ukrainian counterpart, Vololdymyr Zelensky, failed. The event turned to vinegar after the American president launched virulent attacks with regard to Volodymyr Zelensky, accusing him of “playing with the third world war” and summarizing him to pact with Russia, otherwise the United States will drop Ukraine. The Ukrainian President shortened his stay and no agreement was reached.

“The American president plays the card of the confrontation: recent interview with Zelensky, showdown with Beijing, questioning of agreements with the European Union, hardening of sanctions against certain strategic countries. These choices accentuate uncertainty and promote a decline in investments towards assets deemed to be safer. Result: an increased volatility on the markets and a more unpredictable business climate”. Synthesis Fidel Martin, president of Exoé.

Europeans have in reaction played the unit card in London, being determined to support the attacked, during a summit in British capital around Keir Starmer, where the main heads of the executive of the great European powers were invited, a Turkish and Justin Trudeau representative, Canadian Prime Minister.

In addition to this burning geopolitical file, operators will remain attentive to “macro” publications. On this statistical component- and this explains significant relaxation over the American 10 years- the United States remain on a series of disappointing economic statistical indicators. The Consumer Confidence Index (Conference Board) is in particular ironed below 100 points, supporting the scenario of an inflection point in the American economy, whose health is still very good. But a succession of indicators (retail sales, confidence of U-Mich households, or even PMI services barometers) suggest a very slight cooling of the machine.

Moreover, in the U-Mich study on consumer morale, it appears “that the anticipation of long-term inflation of American consumers has jumped at its highest level since … 1995 !5% on a horizon of 5 to 10 years, it is the highest anticipation in 30 years”, was Alexandre Baradez, responsible for market analysis at IG France. This is only a feeling, and not a reality, but the potential impacts on consumption are real.

Investors took note of “PCE” prices on Friday, for personal consumption Expenditures, the flagship of the Fed predilection in its appreciation of inflation. In annual rate, excluding food and energy, prices increased by 2.6%, without gap compared to market expectations. On the other hand, the disappointment is large on the side of household expenditure, in contraction of 0.2% in January, where consensus suggested an increase of 0.2%.

On this side of the Atlantic, a European Central Bank will complete this week a new council of governors. The German asset management company DWS expects that “the European Central Bank (ECB) will once again lower its deposit rate of 25 base points to bring it to 2.50 % in March, thus marking its sixth consecutive decline. However, the room for maneuver for new rapid reductions seems to be limited. The opinions within the ECB are increasingly shared on the number of rate to come in the coming month, Their pace of application and the question of whether the current monetary policy is already restrictive. “

This Monday, the trades learned of the PMI Manufacturer in final data for February, at 47.6 points slightly above expectations thanks to a German component which pleasantly surprised at 46.5, although clearly below 50 points.

“The latest PMI data highlights the beginnings of an improvement in the first quarter environment: new orders have indeed displayed their lowest decrease since May 2022 and production has come closer to stabilization. Thus, after almost three years of recession, it seems that the sector can return to very slight growth in the coming months, trend that should promote the rapid constitution of a government in Germany More stable in France and an agreement on customs tariffs with the United States, “said Dr. Cyrus de la Rubia, chief economist at the Commercial Bank Hamburg.

To be continued at 4:00 p.m. the ISM US manufacturing industrial activity barometer.

At midday on the foreign exchange market, the euro was treated against $ 1,0470 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 1,0465 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 1,0611 USD.

The profitability hope of this Forex strategy is 464 pips and the risk of loss is 146 pips.

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