EUR/USD: CHANGE OF TECHNICAL FROM

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An unbalanced trade agreement, then a rather firm tone adopted by J Powell in conclusion of the FOMC will have fueled this week a significant reflux of the euro against the dollar, the single currency breaking its mobile average at 50 days (in orange) without any form of hesitation.

Yesterday ended, therefore a new monetary policy committee of the FED, ended by a status quo on guiding rates – it was highly awaited. What was less so on the other hand is the tone hawkish From the boss of the Fed, which drastically reduces the probabilities of monetary easing at the end of the next deadline in September. D. Trump will be delighted …

We knew that Powell had been based for months for consumer health and employment to justify his prudent posture, while distrusting the potential inflationary consequences of the Trumpian trade war. But the resolutely offensive tone, even beyond prudence, will have surprised market workers on Wednesday evening. And that rebatts the cards from a technical and graphic point of view (see below).

Thus, the prospect of a growing gap in “remuneration” between the two currencies is strengthened in favor of the dollar

“Jerome Powell insisted on a cautious approach and dependent on the data, without giving clear indications on the future trajectory of the rates. He even minimized the importance of the economic forecasts of June, which were tabling on two rate drops of 25 base points by the end

“The majority of the committee seems to expect sharper signals indicating a deterioration of the job market or stabilization of inflation anticipations. Recent data go in this direction, which could ultimately strengthen the probability of a drop in rates this fall.”

However, the NFP (non-Famr Payrolls) should show private employment health, tomorrow, and the very first GDP estimates in T2 (+3%) pleasantly surprised yesterday by emerging beyond the consensus.

This “advanced estimate of GDP in the second quarter revealed an annualized growth of 3.0 % of the American economy, after a contraction of 0.5 % in the first quarter. However, this improvement was driven by a drop in imports, reflecting the volatility of trade flows linked to customs tariffs.”

Furthermore, the trades continue to digest the contours of the trade agreement signed on Sunday between Donald Trump and U Van der Leyen, the chief of the executive of the 27. This agreement brings the customs duties imposed by the United States on European imports at 15%. Without common ground, Washington would have inflicted customs taxes of 30% on Europe from August 1.

This “deal”, described as “larger” never concluded in terms of trade by Donald Trump, includes a certain number of exceptions, with products taxed at 0% of the two business partners, including aeronautical equipment, equipment for semiconductors, and certain agricultural products. But not alcoholic products whose fate must be decided “in the coming days,” said Ursula von der Leyen.

The text also provides that Europeans will buy $ 750 billion in energy products from the United States and will invest $ 600 billion in the country.

“Why so many gifts to the Americans?” Asked, indignant, Véronique Rich-Flores, independent economist. “The EU’s trade surplus with regard to the United States would have disproportionately increased in recent years”, Ms. Von Der Leyen, president of the Commission and negotiator for the EU who abounds in the direction of D. Trump and thereby forget that the Americans compensate for a large part of their deficits of goods by comfortable excess of services. “

At the macroeconomic agenda this Thursday, to follow the PCE prices at 2:30 p.m. in priority. This is the favorite measure of the Fed in its appreciation of inflation. To follow also the weekly registrations for unemployment benefits in the United States, before the expected publication, tomorrow, of the NFP (non-Farm Payrolls), the monthly federal relationship on private employment health across the Atlantic.

At midday on the foreign exchange market, the euro was treated against $ 1,1440 approximately.

Key graphics elements

We were waiting to see the nature of the passage under the mobile average at 50 days (in orange), a trend curve which hitherto constituted a dynamic area of graphic support, with precision. This is a break without hesitation, from July 28 to 30. The Haussier scenario is called into question at this stage, and let’s move on to “neutral” our opinion. A sweater On the evoked mobile average would only confirm this change in technical framework.

Medium term

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

We will keep this neutral opinion as long as the courses of Euro Dollar parity (EURUSD) are positioned between the support at 1,1460 USD and the resistance to 1,1674 USD.

Daily data graphics