EUR/USD: Powell orchestrates its monetary softening, Tempo Moderato

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The dollar stopped its small hemorrhage in front of the euro after the Fed Monetary Policy Committee. Admittedly, the powerful monetary institution lowered the remuneration of the Fed Funds by 25 bases – it is very much expected -, but the stake was elsewhere: to what extent was the tone adopted by the Fed going to presage a softening in the coming months?

Verdict: The boss of the Fed, who spoke at a press conference, half an hour after the monetary decision proper, sent a rather prudent message. If he suggested that this monetary easing could be followed by other drops by the end of the year, the descending trajectory of the guiding rates is not, however, frozen in marble. The reflection of the governors of the Fed will therefore be a meeting by Réunion, a much less accommodating strategy than the market had imagined in the wake of Jackson Hole and the August monthly report on employment.

“We could qualify the decrease in rate drop in the” risk management “FED type. It illustrates the fact that the central bank is now more important to the slowdown in the job market, since it reduced its rates while providing for new decreases in 2025”, decrypts Jack McIntyre, portfolio manager at Brandywine.

This slowdown in employment, very sensitive, is to be linked in particular with the collapse of the number of new immigrants on American territory.

“It is logical to anticipate other rate drops, monetary policy acting with a gap, and employment statistics being themselves delayed indicators. The weakening of the labor market will eventually weigh on inflation, which explains the will of the Fed to wait in the face of persistent inflation. The differences of views within the Fed concerning 2026 are significant, which leaves more volatility In the financial markets next year.

At the macroeconomic agenda this Thursday, to follow in priority indeed the weekly registrations for unemployment benefits in the United States, as well as the manufacturing index “Philly Fed” at 2:30 pm. Yesterday in the statistical chapter, investors had knowledge of the final data of consumer prices in the euro zone, confirmed at +2.3% in data annualized for August, in accordance with the first estimates, excluding volatile elements (food, energy, alcohol and tobacco).

At midday on the foreign exchange market, the euro was treated against $ 1,1840 approximately.

Key graphics elements

The slaughtered oblique in black decks, defining the quality of the bottom bullish trend. Following a new support on this benchmark, the Bollinger bands are initiating a slight spacing, we resume our upcoming work on the pair of currencies, which has sufficiently consolidated.

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 1,1840 USD. The course of course in our Haussier scenario is 1,2465 USD. To preserve the committed capital, we advise you to position a protection stop at 1,1599 USD.

The profitability hope of this Forex strategy is 625 pips and the risk of loss is 241 pips.

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