EUR/USD: pressure on the euro as on the dollar, the pair stagnates

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The dollar lost its superb since the declaration of trade war by the White House. Its tenant for four years continues to blow hot and cold on customs duties that will be applied to products entering US territory, coming from its immediate Canadian and Mexican neighbors, Europe and the main Asian powers. Enough to reshape international trade in which the rules of the game have not been changed for a quarter of a century and the entry of China into the WTO.

Bloads remain nervous upstream of the date of April 2 to which the United States intends to set up reciprocal customs duties on all of their imports. On Wednesday, Donald Trump had already announced customs surcharge on automotive imports from April 3. “The American president, suggested that the customs of customs duties could be smaller and more targeted,” notes Sebastian Paris Horvitz, of LBPAM.

“Nevertheless, Europe and Canada are likely to have a ‘special’ treatment. Donald Trump threatened these partners with harder measures if they took initiatives that harm in the United States,” said the economist. Given the successive flip-flops in recent weeks, it will be necessary to wait for the decisions of April 2, to maintain or change our assumptions on economic impacts, “he added.

In the statistical chapter Thursday, relative good news to report concerning American growth in the fourth quarter, at +0.4% in final data against 0.3% in the first estimate. As for weekly registrations for unemployment benefits, they “point” to 224,000, perfectly in the target defined by consensus. In the immediate future the operators on currencies have just taken note of the PCE (Personal Consumption Index), the predilection measure of the Fed in its appreciation of inflation. These prices increased by 0.4% monthly in February, above a 0.3% consensus.

“What is certain is that Donald Trump’s reversals on the issue of customs duties create strong uncertainty at present and economic agents are adapted. Households consume less. It has also been seen in companies like Walmart and companies constitute stocks before the implementation of customs duties, further aggravating the deficit of the American trade balance, GDP in the first quarter “, adds Joffrey Ouafqa, director of management Pôle Asset Management of Auris Gestion.

For its part, the euro remains in vice between on the one hand, a significant contraction of appetite for the risk and the positive influence of the sudden loosening of the German budget belt.

“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. Although the announced plans are still preliminary, they reflect a growing will of European leaders to increase military spending in response to the reduction of the United States’s commitment to European defense affairs and Ukraine,” Investment Officer at UBS WM France.

At midday on the foreign exchange market, the euro was treated against $ 1,0770 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