EUR/USD: Trend is your friend, the trend is your ally

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Above the $ 1,1675, crossed in the second part of last week, the pair of Euro / dollar currencies continued its ascent, ‘the withdrawal of the greenback translated[sant] The confusion in the economic policy implemented across the Atlantic “, in the synthetic words of Philippe Waechter, director of Economic Research at Ostrum Asset Management.

“The uncertainty generates a form of hesitation of investors who no longer mechanically follow interest rate arbitrations. The impossibility of decisions of the White House and the lack of long -term clarity of economic policy put off investors.”

The prospect of a next drop in federal rates, punctually nourished by halftone American statistics, also contributes to the trend of the pair of flagship currencies. Even if J Powell, the boss of the Fed, has only “a key word: he was the wait -and -see. He closed the door opened by two FOMC members, Christopher Waller and Michelle Bowman, who argued for a drop in rates as soon as the July meeting. Recalling that the Fed did not” need to be pressed “, Jerome Powell keeps it above all necessary to assess the Before acting “, for Thomas GIUDICI, head of the bond management of Auris Gestion.

But the market is starting to “prevail” a monetary softening. According to the CME Group’s Fedwatch tool, the probabilities of dropping Fed Funds at the end of the month of September exceed 90%.

Employment statistics, unrolled throughout the week, make it possible to refine this probability. Note that the NFP (Non Farm Payrolls) report will be exceptionally published Thursday, July 4 being naturally unemployed across the Atlantic: it is the sacro-Saint of independence. Yesterday the new job offers (JOLTS) sent positive signals, before the publication at 2:15 p.m. of the survey of the private firm ADP.

Yesterday on the statistical side of this side of the Atlantic, inflation in the euro zone is generally emerged in line with expectations, with an increase in prices of 2% over one year in June after 1.9% in May. “The slight increase in total inflation in June was expected, but underlying inflation remains stable for its part,” notes Juliette Cohen of CPR AM.

The increase is 2.3% if you remove energy, food, alcohol and tobacco from the basket, the most volatile elements.

“The mission of the European Central Bank is generally accomplished and a break can now be envisaged unless additional trade tensions between Europe and the United States are not materialized in the coming weeks,” continued the active management decide.

At midday on the foreign exchange market, the euro was treated against $ 1,1770 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).

The relative force index (RSI) is in full convergence with the courses.

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 1,1770 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 1,1673 USD.

The profitability hope of this Forex strategy is 443 pips and the risk of loss is 97 pips.

Daily data graphics