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The pair of Euro / dollar currencies consolidated the advance of the beginning of the week, while this Thursday is particularly dense for the trade, both on the commercial front, and monetary macroeconomic.
On the front of customs discussions between Washington and Brussels, according to diplomatic sources close to the file, cited on France Info, customs surcharge could reach 15%, far from the 30% Brandi initially.
Yesterday was the conclusion of an agreement between Tokyo and Washington which gave hope on this thorny file. Donald Trump announced in the night from Tuesday to Wednesday to a “huge” agreement with Japan which brings customs duties imposed on Japanese imports to 15%, much less than the 25% which threatened to strike the archipelago from August 1. This agreement mainly revives the hope that other positive announcements will follow as the deadline of August 1 approaches.
On the component of statistical publications, traders have the opportunity to take the economic health pulse of the euro zone, with the famous PMI activity barometer indicators. If the Manufacturer PMI came out closely close to expectations, a hair of the 50 points*, the Services component pleasantly surprises by winning 0.7 points at 51.2.
“The economic recovery of the euro zone has gradually consolidated in recent months. The recession of the manufacturing sector seems to be coming to an end, while the growth of the services sector has accelerated slightly in July. According to our immediate GDP forecasting model, which takes into account the PMI Flash Hcob index, the economy of the euro zone should record a sustained expansion in the third quarter Corrobrate with data from the next few months, “deciphers Dr. Cyrus de la Rubia, chief economist at Hamburg Commercial Bank, who completes the following lights on the two main economic power of the monetary union.
“Germany should record weak economic growth in July, while France is oriented towards a slight contraction, a difference which is partly explained by the political climate in these two countries. The massive reductions of public spending announced by François Bayrou and the threat of censorship weighing on its government explain in particular the strong fall in the confidence recorded during the month in the French manufacturing sector.”
But the main event of the Cover this Thursday is of course the outcome of the BCE Governors’ Council. My step that there is any suspense on guiding rates – they will remain unchanged after seven consecutive drops -, but operators on currencies are looking for clues for the future.
“The ECB should maintain its unchanged rates, a decrease 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 the tariff threats darken the prospects. It is the political signals, and not the concrete measures, which will determine the reaction of the markets”, explains David Zahn, Franklin Templeton.
Customs issues, and their potential inflationary consequences, will naturally be mentioned at a press conference.
For the next deadlines, “a lower dollar, and therefore a higher euro, would increase the probability of a new drop in rates by the ECB. A new climbing of the trade conflict between the EU and the United States could also force the ECB to further lower its key rates. The White House recently set the deadline for negotiations on August 1”, deciphers Dr. Felix Schmidt, Economist Senior Berenberg.
“The ECB therefore has every interest in waiting for the results of the discussions and keeping its cartridges for the moment. By its next meeting, scheduled for September 11, the pricing fog should have dissipated enough to allow a new assessment of the situation.”
At midday on the foreign exchange market, the euro was treated against $ 1,1750 approximately.
* 50 points is the bar which by construction, separates a contraction (below) from an expansion (above) of the sector considered.
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 1,1747 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 717 pips and the risk of loss is 288 pips.
The News Bulletin 247 Council
Daily data graphics
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