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The euro continues its rebound against the dollar, carried by a more favorable macroeconomic environment in the euro zone and a context of weakening the greenback. The prospect of a peace agreement in Ukraine fuels a renewed optimism, reinforced by the announcement of diplomatic contacts between Donald Trump and Vladimir Putin. This dynamic benefits European assets, in particular sectors linked to consumption, growth and reconstruction. In addition, the latest retail data in the euro zone confirm a resilience of the demand, with an increase of 3.1 % over a year in June, greater than expectations.
Across the Atlantic, the dollar is penalized by disappointing statistics and a climate of institutional uncertainty. The report on non -agricultural employment published last Friday revealed a clear degradation of conditions on the labor market, with job creations lower than expectations and revisions decreasing for previous months. Weekly unemployed registrations expected to increase this trend. Consequently, anticipations of drop in rate of the federal reserve are strengthened: the markets now integrate a probability of 94 % for a drop of 25 basic points from the September meeting, compared to 48 % a week earlier.
The political climate adds an additional factor of distrust. Donald Trump’s decision to dismiss the manager of the Bureau of Labor Statistics, which he accuses of publishing biased figures, feeds fears of increased politicization of economic institutions. The imminent appointment of a replacement for the outgoing governor of the Fed, Adriana Kugler, as well as speculation around the successor of Jerome Powell, help to maintain uncertainty. The candidates mentioned, like Kevin Warsh or Kevin Hassett, are perceived as supporters of a more marked monetary, which weighs more on the dollar.
On the technical level, the European motto finds a clearly upward dynamic. The recovery movement is based on a succession of impulsive candlesticks, reflecting persistent buying pressure. A fence above 1.17 would strengthen this signal and pave the way to the highest annuals, with an objective located around 1.20, important psychological threshold for the trades. The configuration remains favorable as long as the euro remains above the 1.14 support area.
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 1,1682 USD. The course of course in our Haussier scenario is 1,1970 USD. To preserve the committed capital, we advise you to position a protection stop at 1,1380 USD.
The profitability hope of this Forex strategy is 288 pips and the risk of loss is 302 pips.
The News Bulletin 247 Council
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I have over 8 years of experience working in the news industry. I have worked as a reporter, editor, and now managing editor at 247 News Agency. I am responsible for the day-to-day operations of the news website and overseeing all of the content that is published. I also write a column for the website, covering mostly market news.
