EUR/USD: a balance of power in favor of the single currency

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The euro, a barometer at the end of measurement of the risk of the risk of the financial markets, still gained ground against the dollar, against the backdrop of hope on international trade and the geopolitical situation in the Middle East. On this last point, the cease-fire knotted between Iran and Israel in the Middle East on Tuesday. “The markets can breathe more freely, but do not confuse a tactical break and strategic resolution,” warns Stephen Innes of SPI AM.

“Despite the fears of the weekend following American bombings, we saw a rapid and massive de-escalation of tensions in the Middle East. A limited response from Iran, without impact on energy facilities, and American pressure opened the door to a truce between Israel and Iran”, would like to highlight Xavier Chapard, strategist at LBPAM.

“If risks persist (respect for the ceasefire, the real state of Iranian nuclear installations …), this de-escalation is favorable for the world economy,” he adds.

Admittedly, uncertainty remains on customs duties as the deadline of July 09 approaches, from which American imports in the EU will be surcharged. But this date which could however be rejected, according to Karoline Leavitt, the spokesperson of the White House.

At the same time, the greenback suffers from the increasingly clear prospect of an upcoming decrease in federal rates, even if J Powell, the boss of the Fed, plays the watch by relying on the flourishing health of the job market and the inflationist consequences still difficult to quantify the trade war. As a reminder in T1, American GDP fell 0.5%, much more heavily than the previous estimates augur.

This afternoon, the American figures of the day will be all militant or not clues for a monetary softening of the dollar.

To be continued in particular, at 2:30 p.m., the PCE price dynamics (personal consumption Expenditures). “”[Ces prix] are the most monitored by the members of the federal reserve, these are those used in the quarterly projections of the institution and who serve, among other indicators, to adjust the level of the rate range, “recalls Alexandre Barade (IG France).

“The publication of these figures comes in a particularly tense context between Donald Trump, several members of his administration and Jerome Powell.” This week will have been the occasion for a new salvo of criticism of the American executive (or rather of the very person of Donald Trump) on the boss of the Fed, that he nicknamed Jerome “Too Late” Powell.

Donald Trump was delighted with his departure, next May because he “finds him quite terrible”. The tenant of the White House also said that he had three to four people in mind to succeed him … “Donald Trump once again qualified on Wednesday afternoon, Jerome Powell as” very stupid person “with a” weak qi “…”

And this while the boss of the Fed completed his two -day hearing in front of the congress in the heart of the week. During this traditional semi -annual hearing, J Powell temporarized, highlighting the solidity of employment and the potential inflationary consequences of the customs of the White House.

“True to his mantra of the moment, Jerome Powell persists in his posture of strategic patience. Faced with inflation deemed too uncertain, the impact of customs duties difficult to quantify, a globally resilient economy and a labor market far from the break, the president of the American institution does not see any reason to modify monetary policy and especially do not want to react prematurely” Responsible for the bond management of Auris Gestion.

The active managing decision -maker notes “however that if the job market keeps, on the front, a full -employment pace, it nevertheless shows some signs of fragility, in particular through the slowdown in job creations or the rise in claims of allowances. Above all, the drop in the rate of participation, which Jerome Powell was well kept to explain but which is largely influenced by the backdone of immigration, could artificially contribute to maintaining the low unemployment rate “.

“Thus, if the members of the FOMC voted unanimously in favor of the status quo (maintenance in guiding rate in the range 4.25% – 4.5%) and always anticipate two rate drops for the end of the year, their forecasts are increasingly dispersed in the face of the uncertainty of macroeconomic scenarios: ten members provide two or more rate of rate, while nine or less. “

To follow at 4:00 p.m. the American consumer confidence index (Michigan University). As a reminder, the Household Confidence Index (Conference Board) published earlier in the week reflected at 93 points, missing expectations.

At midday on the foreign exchange market, the euro was treated against $ 1,1720 approximately.

Key graphics elements

The release of the technical camisole is confirmed, coming to give more meaning to the supporting of the mobile average at 20 days (in dark blue).

The buying position on the spot can be kept as long as the oscillations are built between this trend curve and the high bollingger strips (20; 2.5).

Medium term

In view of the key graphic factors that we have mentioned, our opinion is positive in the medium term on Euro dollar parity (Eurusd).

Our entry point is 1,1718 USD. The course of course in our Haussier scenario is 1,2213 USD. To preserve the committed capital, we advise you to position a protection stop at 1,1519 USD.

The profitability hope of this Forex strategy is 495 pips and the risk of loss is at 199 pips.

Daily data graphics