EUR/USD: no Advanced dollar frank after the NFP

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Antagonistic forces compressed the pair of Euro Dollar currencies in the short term, moreover upwards in its substantive, medium and long term dynamics.

On the one hand, the euro, currency at risk par excellence, suffered fromAn atmosphere gradually weighed up when approaching the deadline on July 9. On this date, all of the customs from customs presented last April by Donald Trump are supposed to come into force. The American president said that he was going to send a dozen letter to the countries concerned by his customs surcharges which will vary in a range of 10-20% or even can go up to 60-70%.

“We have some other negotiations, but you know, I would tend to send a letter to specify the customs duties they will pay,” he also added.

The European Union is also in this phase of negotiations with the American administration, with a view to finding an agreement before the fateful date of July 9. The president of the European Commission, Ursula von der Leyen, said he wanted a “negotiated solution”. The United Kingdom and Vietnam reached an agreement with the United States, while Washington and Beijing concluded a truce on customs duties last May.

And on the other hand the dollar failed to capitalize on the publication of an excellent NFP (non -Farm Payrolls). This inventory of American private employment health has indeed sent excellent signals.

First education: the unemployment rate went from 4.3% to 4.1%, beating expectations. Like post creations at 143,000, when the market seemed to be tense after the publication of the FURNITIES of the ADP. Finally, the monthly increase in hourly wages is on average 0.2%.

What give credit to the attitude of delay of J Powell. D. Trump, whatever happens, will continue to put pressure, sometimes even crossing the limit of disrespect and insult, with regard to the Patrier de la Fed.

According to the Fedwatch tool of the CME Group, the probabilities of a monetary easing of 25 base points at the end of this month have just collapsed, passing in an instant from 23.3% to 6.7%. The greenback only timidly resumed some “pips” against the euro in the wake of the publication.

“In response to the employment report, the money markets abandoned their bets on a reduction in the Fed in July, postponing the calendar of the next decrease of 25 base points (0.25 percentage points) to October, and now expected only 50 points of flexibility this year (compared to 66 base points before publication)”, explains Michael Brown at Pepperston.

“A report on solid employment would probably definitively rule out the (very low) probability of a rate drop in July … and Jerome Powell will suffer the pressure from Donald Trump all summer,” warned Alexandre Baradez, responsible for market analysis at IG France, in a note published before the publication of this statistics.

Finally note Donald Trump’s legislative victory with the voting in the congress, of his budgetary law XXL, which according to many observers, risks digging deficits, for the benefit of the wealthiest classes.

Bover will be deprived of benchmarks from Wall Street, closed for the American national holiday, on July 4, commemorating the declaration of independence of July 4, 1776, vis-à-vis Great Britain.

At midday on the foreign exchange market, the euro was treated against $ 1,1765 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 negative in the medium term on Euro dollar parity (Eurusd).

Our entry point is 1,1765 USD. The lens of our lowering scenario is 1,2464 USD. To preserve the committed capital, we advise you to position a protection stop at 1,1619 USD.

The profitability hope of this Forex strategy is 699 pips and the risk of loss is 146 pips.

Daily data graphics