EUR/USD: euro withdrawal after geopolitical conflagration in the Middle East

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The euro, one of the barometers of the appetite for the most reliable risk of appetite for the risk contracted significantly in front of the dollar, returning to test the character of support of $ 1.15, in a market seized by the embracement of the geopolitical situation in the Middle East.

Israel proceeded to a “preventive strike” against Iran, the Israeli Minister of Defense said on Friday, June 13, after the US President Donald Trump warned that Israel could soon strike Iranian nuclear sites. Prime Minister Netanyahu has announced that Israel struck “at the heart” of the Iranian Uranium enrichment program. Iran retaliated, Israel announcing that Tehran had launched around 100 drones towards the country.

A new cycle of discussions between American and Iranian officials was scheduled for Sunday in Oman as part of the negotiations between the two camps for a new nuclear pact, against the backdrop of acceleration of the Tehranium Uranium enrichment program.

Hossein Salami, the commander -in -chief of the revolution guards, was killed last night.

“The coming days will tell us at what risks we are going to be confronted, but they are clearly negative for the world economy,” said Sébastien Paris Horvitz, of LBPAM. “We can only fear an escalation. In fact, the scholarships react negatively (…) and the price of oil is flying away, reaching a price around $ 75 a barrel (Brent), have been at the highest level since the start of the year,” continues the economist.

Yesterday, however, the dollar was contracting more, after a trade agreement announced between China and the United States, with the main stakes rare, and as customs duties.

Donald Trump said the agreement with China was “concluded” subject to final approval from him and that of Xi Jinping, the Chinese president. This agreement will, according to him, allow a regular supply of rare land to the American economy. “We get a total of 55% customs duties, China 10%,” he said. This seems to correspond to customs taxes of 55% against Chinese imports, and conversely, China would apply customs tariffs of 10% towards American imports.

These Chinese rare lands are a key issue in negotiations, the United States hoping that the pace of the expeditions of these strategic metals, which has slowed down since the American president launched his world trade war in early April, said AFP.

But it is clear that the terms of the agreement, which must still be formally signed by the two heads of state, leaves the circumspect market.

In the statistical chapter, Thursday, operators learned of an advanced indicator of very reassuring inflation, production prices, which only increased in May 0.1%, under the target defined by consensus. In addition, the American Labor Department has just unveiled 248,000 new registrations for unemployment benefits over a week, a figure relatively close to expectations. To be continued this Friday at 4:00 p.m. Friday, preliminary data of the American consumer entrust index (Michigan University).

At midday on the foreign exchange market, the euro was treated against $ 1,1500 approximately.

Key graphics elements

Thursday the spot freed from the grip of a resistance zone at $ 1,1460, a zone which is already early tested, in the form of a sweater This Friday. The absence of upward expansion after the crossing of the $ 1,1460 is doubted about the capacity of the spot to continue in the coming weeks its substantive ascending movement. The test of the mobile average at 50 days (in orange) will therefore be essential.

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 courses of Euro Dollar parity (EURUSD) are positioned between the support at 1,1460 USD and the resistance to 1,1674 USD.

Daily data graphics