EUR/USD: A blow for the dollar … and for the euro!

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The dollar suffered, of course, from the risks of contraction of the American economy induced by the triggering of a trade war by Donald Trump, who erects customs herses around his fortress … Deutsche Bank notes that Donald Trump has shown no sign of perspective on the reciprocal customs duties announced last week. Unless last minute reversal, these customs surcharges will therefore come into force on April 9, on Wednesday.

But at the same time the Euro, a reference barometer of appetite for the risk on the financial markets, already marked the step, hence an early entry into consolidation only two days after the “Liberation Day”.

“The question therefore arises whether and when Donald Trump will be convinced to backtrack and avoid more damage to American and global trade,” wonders Vincenzo Vedda, CIO at DWS. “Or if the American president will finally be reprimanded by the American courts. The situation has at least deteriorated much more severely than what had already been feared. [Le 02 avril] was only another step on the way that leads from a world globalized to a much more protectionist world. “

“As political uncertainty has increased sharply, the attention of the currency market turned to a potential recession in the United States. A recession is clearly negative for the dollar,” says the active management decision maker.

In the statistical chapter, we will note the collapse of the “feelix”, a confidence barometer of investors in the euro zone published yesterday, in the immediate vicinity of the -20 points. The only German component melts at -36.3 points. In the survey, published this morning, it can be read that American economic expectations have fallen at their lowest level since October 2008, while the price shock has fueled the fears of a global recession.

Published this morning, France’s trade deficit deteriorated in February, at almost 8 billion euros, against -6.5 billion euros, completely missing the target.

At midday on the foreign exchange market, the euro was treated against $ 1,0930 approximately.

Key graphics elements

After the very clear crossing of $,0608 the pair of currencies had entered a long -range lateralization phase, a phase now finished. A bullish outing is in full expression, even though the Bollinger bands go away strongly. Nevertheless in the short term, the early entry into consolidation is the predilection scenario, around the mobile average at 20 days (in dark blue).

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