EUR/USD: PCE prices in a statistical highlight of the week

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The euro continued its movement of lateral consolidation in the face of the dollar, with the support of the prospect, now clear, to see Germany exploding its budgetary lock, its famous golden rule.

“The structural changes in fiscal policy in Europe, more particularly in Germany, are surely important factors that have triggered the Haussier Movement of the single currency” sheds light on Claudia Panseri, Chief Investment Officer at UBS WM France. “Although the announced plans are still preliminary, they reflect an increasing desire for European leaders to increase military spending in response to the reduction of the United States’s engagement in European defense affairs and help from Ukraine.”

Bover also keeps an eye attentive to the date of April 02, and the entry into force, possibly, of new customs taxes at the entrance to American territory. And this on the principle of reciprocity. According to the Wall Street Journal, some sectors could be excluded from these customs surcharges.

“The wait-and-see attitude will dominate before the announcement by Donald Trump, on April 2, of reciprocal customs duties potentially followed by retaliatory measures from the trade partners of the United States”, sums up César Perez Ruiz, head of investments and CIO at Pictet Wealth Management, which is a key moment of week, this Friday, March 28 with the publication of the preferred measure Price dynamics: “Basic PCE inflation, the Fed anticipating a delay in the disinflationary trend this year, partly due to customs duties. In the perspective of 2-Force-the” Liberation Day “according to Donald Trump-, the European Union has postponed its 50% customs duties to mid-April on American whiskey, which leaves a margin of negotiation.”

A Fed who sees his equation becomes more complex, the last FOMC (Monetary Policy Committee) has fully shown it. “Decrease in growth, increase in inflation … The Fed is taken between two fires and, if not knowing on which foot to dance, it prefers not to over-react and it has the means”, in the words of Thomas GIUDICI, head of the bond management of AURIS GESTION. “Jerome Powell absolutely wants to avoid starting up on a restrictive monetary policy, the effects of which take time to spread in the economy, while the ambient uncertainty and the impacts of customs duties could only be passengers. The fact that FOMC members anticipate two drops of guiding rates by the end of the year while inflation could be perceived as a market financiers who rather welcomed the news. “

In the statistical chapter this Tuesday, the trade in the IFO index of the business climate in Germany, released slightly at 86.7, very close to the target. The matrix cycle matrix tool clearly shows a trajectory of the “crisis” box towards the “recovery” box. The big meeting this afternoon at 3:00 p.m. on the statistical aspect is the sacrosanct conference of household confidence confidence (understanding: consumers!) Across the Atlantic. An important benchmark at a time when inflationary fears of Trump’s expansionist and anti-immigration policy weigh on the morale of buyers.

At midday on the foreign exchange market, the euro was treated against $ 1,0820 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. This consolidation comes in terminal phase in contact with the mobile average at 20 days (in dark blue), on the tightening background of Bollinger strips.

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