EUR/USD: horizontal consolidation channel

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The euro continued its consolidation against the dollar, with the support of the vote by the Bundestag, the lower chamber of the German parliament, of the reform of the so -called “debt brake”. This reform constitutes a prerequisite for the proper implementation of the mega investment plan of several hundred billions of euros in defense and infrastructure.

“Expenses and public investments in the defense and infrastructure will significantly increase in Germany in the coming years which will benefit growth,” synthesizes Aline Goupil-Raguénès of Ostrum Am, which however specifies that “the effect should probably not be felt before 2026 since in the defense field, Europe is mainly supplied to the United States. Given the constraints of production capacities.

“The brutal reversal of the United States vis-à-vis its allies, its probable withdrawal from NATO and the rapprochement with Russia, constitute an electric shock for Europe forcing it to react quickly. This is the only positive point of the return of D. Trump to the White House,” says the manager in asset management.

The trades also digit the last FOMC (monetary policy committee) of the Fed, which at the bottom only highlighted the navigation made delicate of the monetary institution. As expected, the American central bank maintained its guiding rates unchanged. But the “plots”, that is to say the projections (and not the forecasts) of the Fed members were published. It turns out that the members of the central bank are more pessimistic about American growth as well as for inflation.

“It is therefore not a break or” dovish “or” hawkish “, but a break justified by uncertainty. Rightly so, the Fed has less conviction, but it is aligned with the market on the future orientation of guiding rates. It also expresses greater concern about the slowdown in economic growth and the rise in inflation resulting from the uncertainty linked to government policies” McIntyre, portfolio manager at Brandywine (subsidiary of Franklin Templeton).

These economic anticipations, updated each quarter, were lowered. + 1.7% GDP growth against 2.1%, 2.7% inflation, compared to 2.5% in the last projections and 4.4% unemployment at the end of 2025, against 4.4% of the active population.

“The Fed therefore sails a little in sight, without being able to anticipate in the long term”, for Grégoire Kounowski Investment Advisor at Norman K. “What is likely to irritate Donald Trump. Last night, he again urged the institution to lower his rates while, according to him,” American customs duties are starting to make himself (easily!) Several times criticized Jerome Powell (whose mandate runs until 2026) and his policy of lower rates he deems too slow.

To follow at 4:00 p.m. the consumer trust index in the euro zone.

At midday on the foreign exchange market, the Euro was treated against $ 1,0830 approximately.

Key graphics elements

The crossing in significant volatility of $ 1,0608 changes the situation on the configuration of the currency pair, which has just validated a resumption of support on a long mobile average, at 50 days (in orange), which begins a resource figure. The scenario of a fast melting towards the perfect parity (€ 1 = $ 1) is invalidated.

Medium term

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

We will keep this neutral opinion as long as the EURO Dollar parity prices (EURUSD) are positioned between the support at 1,0758 USD and the resistance to USD 1,1012.

Daily data graphics