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Without calling into question his bias bias on the background, antagonistic forces shook the pair of Euro / dollar currencies. The French political risk first of all, with the mechanical impact on the OAT10 years first, then the flouted independence of the Fed, with the latest event, the dismissal of the Fed governor, Lisa Cook, which disputes the legality of this decision. On this last point, this movement once again illustrates the will of the American executive to take control of an institution which needs to be independent to be credible with the markets.
Recall that the probabilities of decreasing federal rates next month have risen upwards after the intervention of J Powell as part of the Jackson Hole symposium.
Taking a speech at the center of attentions at the end of this great mass of the main Argentiers on the planet gathered in the idyllic framework of the eponymous Wyoming valley, “Jay” Powell, without formally engaging his institution, paved the way towards a monetary relaxation.
The United States is approaching the moment when the FED will have to lower its interest rates to support employment, said on Friday August 22, the president of the central bank Jerome Powell in a long-awaited speech, especially by Donald Trump. A “rapid” degradation of the American labor market is not to be excluded and could “justify” a relaxation of monetary policy, and therefore of interest rates, warned the boss of the institution from the meetings of Jackson Hole, in Wyoming (West).
He adds that the Fed is in a “delicate situation” because the new customs duties set up by the American executive begin at the same time to affect the prices paid by consumers at the risk of reviving inflation.
“This inflection of discourse constitutes a surprise compared to the more measured interventions of the last months of the president of the Fed”, Act Thomas GIUDICI, head of the bond management of Auris Gestion. “It also appears to be out of step with the minutes of the July meeting (having nevertheless taken place before the degradation of the latest employment figures), published a few days before Jackson Hole, where a majority of Fed officials were more concerned with inflationary pressures than the slowdown of the labor market. It remains to be seen whether this inflection reflects the only opinion of Jerome Powell or a more widely shared vision Fed.
On burning political news in France, the Prime Minister of the second economic power in the euro area announced on Monday that he would submit his government to a vote of trust on September 8, thus paving the way for a risk of censorship. Especially since the national rally, rebellious France, the Socialist Party and the environmentalists have announced that they will not give confidence to the government in the context of this ballot. Between them, the deputies of these different political camps mathematically form a majority, leaving little chance of the maintenance of the current government. The hypothesis of a new Prime Minister, with necessarily different polite balances, becomes the privileged working basis.
This announcement has rekindled the spectrum of a political blocking in France, with the risk that measures necessary for the recovery of the trajectory of French public finances are not taken. OAT 10 years heats up above 3.51%, above Greek rates in the same way (3.46%).
On the macroeconomic component yesterday, the traders learned of the IFO index of the business climate in Germany, the first economy in the euro zone. The index rose up at 89.0 points, slightly above expectations. A resumption of the German economy which, if it has the merit of confirming again, remains very fragile, under the terms of Klaus Wohlrab, director of IFO.
To follow at 4:00 p.m. the Consumer Confidence Index (Conference Board).
At midday on the foreign exchange market, the euro was treated against $ 1,1640 approximately.
Key graphics elements
The pair of Euro / dollar currencies is in the marked ascending phase, background, above an oblique right that makes sense. We have represented this linear level of graphic support in black. In the immediate future, we will keep an eye attentive to the relative positioning of the mobile averages at 20 (in dark blue) and 50 days (in orange) to optimize the entry points.
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 1,1640 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 824 pips and the risk of loss was 181 pips.
The News Bulletin 247 Council
Daily data graphics
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.
