EUR/USD: the euro tries to take advantage of the weakness of the dollar

Key graphics elements

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The euro strengthened yesterday, carried by the publication of a disappointing macroeconomic indicator in the United States. The Fed de Dallas monthly index for the manufacturing sector has dropped to -35.8 in April, against -16.3 in March, reporting a clear slowdown in industrial activity, more pronounced than expected. The production sub-indexes, new orders and deliveries fell, while those related to paid prices and employment have displayed progression. The index measuring the prospects of companies has also deteriorated, from -10.7 to -28.3, illustrating a significant degradation of the morale of industrialists.

This deterioration of the perspectives weighed on the dollar, allowing the euro to maintain itself above the threshold of 1.14. Today, market operators expect new catalysts, including the publication of the Conference Board consumer confidence index as well as the JOLTS report (new job offers), expected at 4:00 p.m. French time.

Investors remain cautious in a context marked by uncertainty linked to trade tensions. The news on this front is becoming rarer, even if the Trump administration has recently announced a targeted reduction in customs duties in the automotive sector, by reducing certain taxes on imported spare parts used in the manufacture of vehicles in the United States.

Technically, the European currency remains for the moment in the stabilization phase, pending a new catalyst. In the short term, the euro could maintain a wait -and -see posture. We will nevertheless closely monitor its behavior as the ascending mobile average approaches at 20 periods (in daily data), which could constitute a point of support favorable to a resumption of upward dynamics.

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 1,1202 USD and the resistance to 1,1460 USD.

Daily data graphics