EUR/USD: A major meeting tomorrow, 2:45 p.m.

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The pair of Euro / dollar currencies retained a bias bias, in the short term in the image of its bottom bias, moreover, as the ECB’s “verdict” which should not contain a major surprise. Tomorrow, the powerful Poverty central bank will complete a council of governors. After seven consecutive drops, the ECB is expected to be at the end of this Governors’ Council on Thursday, validate a break from the Euro “rent”.

David Zahn, head of European bond management at Franklin Templeton, anticipates: “The ECB should maintain its unchanged rates, a drop in September remains possible but unlikely. The markets will be attentive to Christine Lagarde’s speech concerning commercial risks and the strength of the euro. Inflation is close to the objective, but tariff threats combine the prospects. will determine the reaction of the markets. “

Verdict tomorrow, Thursday at 2:15 p.m. But it is quite naturally the consecutive press conference at 2:45 p.m., which should interest the business. C. Lagarde will be questioned about the inflationary risks linked to the trade war, and more generally about the impact of a stronger euro on the exchanges between the EU and its business partners.

“If there is probably nothing to expect from the meeting of the ECB to be held on July 24, a status quo on 11/09 is however obviously not engraved in marble”, for Florent Wabont, economist at Ecofi, who puts in particular […] Inflation passing permanently below 2%. At this stage, reading data rather pushes us to consider stability around 2%, in particular with regard to heart inflation. [Ainsi qu’]A marked deterioration of activity in the euro zone. If the situation is not in good shape, the data depicts, however, a form of resilience, despite the heckling imposed by customs duties. “

In the meantime, the dollar continues to lose ground, not only in front of the euro, its hegemonic role in the world exchanges being jostled by the trade war that Trump leads against the rest of the world. Note in this respect that an agreement between Washington and Tokyo has just been signed, while the discussions between Washington and Brussels will resume.

“Unlike the criticism often heard, the depreciation of the dollar does not necessarily harm Europe. In the current context, an appreciation of the euro promotes rebalancing towards more domestic growth (Chart 3). It improves the purchasing power of consumers, reduces import costs and exerts a welcome disinflationist pressure. Need “, analyze experts in Macroeconomic strategy of Dorval AM.

The deadline for negotiations between Brussels and the White House is still set for August 1.

“Although we did not exclude the possibility that the United States and the EU reach a provisional agreement by August 1 which would maintain average customs duties on most EU products at 10%, we think it is more likely than improbable thanhe customs duties on the EU increase from 10%, but without reaching 30%“, try to quantify barclays economists.

At the macroeconomic agenda this Wednesday, to be followed in priority across the Atlantic, sales of old housing at 4:00 p.m. and crude stocks at 4.30 p.m.

At midday on the foreign exchange market, the euro was treated against $ 1,1740 approximately.

Key graphics elements

While the 1,1674 were broken in a certain volatility, we are waiting to gauge the quality of the reaction of spot In contact with the mobile average at 50 days (in orange). So far, this substantive trend curve plays a significant support role, as precise as it is predictive. It is a powerful tool that should not be hesitated to use.

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 1,1743 USD. The course of course in our Haussier scenario is 1,2464 USD. To preserve the committed capital, we advise you to position a protection stop at 1,1459 USD.

The profitability hope of this Forex strategy is 721 pips and the risk of loss is 284 pips.

Daily data graphics