EUR/USD: industrial activity barometers disappoint in France and Germany

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The euro / dollar spot retained a marked bias bias, above an oblique support right (in black). This primary trend is in no way questioned after the last monetary policy meeting of the Fed, marked without surprise by a drop of 25 base points of the guiding rates, but by a tone of relative caution as to the continuation of the monetary easing process.

“Although the American institution is still confronted with two divergent objectives (inflation and employment), the emphasis is now put on a net labor market” cooling “. Admittedly, the unemployment rate remains historically low, partly thanks to the contraction of the offer linked to the migration policy of Donald Trump, but the demand of companies are running out of steam and unemployment increases quickly in certain more fragile subcategories, Especially among young people “, decrypts Thomas GIUDICI, head of bond management of Auris Gestion.

Let us recall the content of the last FOMC, federal report on the employment of August. It highlighted 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.

“On the inflation side, despite the expected rise in the prices of goods linked to customs duties, the FOMC considers that the risk of a new persistent outbreak remains limited: the effect of customs tariffs is always considered transient (even if this risk must be monitored) and the inflation of services continues its decline, although very gradually. The official objective of 2 %.

This Tuesday morning, the trades were able to peel the various PMI studies, these activity barometers calculated after counting of surveys passed with purchasing directors. On the scale of the entire euro zone, the disappointment is clear for the industry, whose component returns below the 50 points, mainly due to German weighting, which completely lacks expectations. For services, the score is more mild (51.4).

“The sharp decline in the volume of new orders in Germany and France also undermines hope for accelerating expansion in the coming months. In the medium term, the increase in defense spending could however stimulate the demand for manufactured goods, and the vast investment plan in the infrastructure adopted by the German government should, in the more immediate future, to support the industrial growth of the euro zone”, commented Dr. Cyrus Rubia, chief economist in Hamburg Commercial Bank.

“Nevertheless, according to the latest survey data, the manufacturers’ confidence in the next twelve months has been fell back in Germany and throughout the region.”

Meet at 3:45 p.m. for equivalent indicators in the United States. At 4:00 p.m. will be unveiled the manufacturing index of the Richmond Fed.

At midday on the foreign exchange market, the euro was treated against $ 1,1805 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 1,1805 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 660 pips and the risk of loss is 206 pips.

Daily data graphics