EUR/USD: solidity test of an upward oblique

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The Eurusd spot is in the support phase on an oblique support right, drawn in black below. The slope of this level of major support measures the power of the depths dynamic of the pair of currencies. A market psychology finally unchanged after the latest developments, on the degradation of the French debt note, and on American monetary policy.

As a reminder last Wednesday, the boss of the Fed, who spoke at a press conference, half an hour after the decrease decision of 25 PDB of guiding rates, 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.

A single governor distinguished himself, voting for a drop of 50 base points at a time of guiding rates.

“First, it is interesting to note that Stephen Miran was the only one to express his disagreement. It seems to us that this could be a deliberate decision on the part of the other members of the FOMC (Monetary Policy Committee of the Federal Reserve of the United States) in order to show their support for President Powell and, in fact, as an implicit act of support for the independence of the Fed. Perhaps we are doing too much,” Note ING economists.

During the press conference, its president, Jerome Powell suggested that this monetary easing could be followed by other decreases by the end of the year. However, it warned that the risks linked to inflation should still be assessed and managed, notes Invest Securities.

The plots dowry (projections in point diagram) augur at this stage in any case, two other decreases of 25 pdb by the end of the year. Because the approach will be “meeting by meeting”.

“The weakening of the labor market will eventually weigh on inflation, which explains the Fed’s desire to wait in the face of persistent inflation. The differences of views within the Fed concerning 2026 are important, which suggests more volatility on the financial markets next year,” analyzed Jack McIntyre, Man manager at Brandywine Templeton) following the Fed meeting.

This slowdown in the labor market is indeed very sensitive, and the last federal report for the month of August, published at the end of last week highlights it. In detail, this NFP highlights a slight increase in the unemployment rate, to 4.3% of the active population, in the target defined by consensus. Target also reached for the average increase in hourly wages (+0.3%). On the other hand – and it is there that the rub -, the creations of posts in the private sector excluding agriculture, expected to decrease at 75,000, in fact point to 22,000.

At midday on the foreign exchange market, the euro was treated against $ 1,1770 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 1,1776 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 1,1539 USD.

The profitability hope of this Forex strategy is 689 pips and the risk of loss is 237 pips.

Daily data graphics