EUR/USD: J Powell reaffirms his prudent posture

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Not without a certain volatility, the pair of Euro / dollar currencies remains camped above an oblique right of long-term support, with a strong slope, which materializes the primary trend, in the sense of Dow.

Yesterday, the Bover was 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.”

In addition to the Atlantic, the PMIs have not revealed any surprises, not deviating from an iota.

This morning, the IFO index of the business climate in Germany came a slight drop to 87.7, against the consensus, mainly due to the “perspective” component of the index, which melts much faster than the “current feeling” component.

But the business is mainly concentrated, this week on the upcoming publication of PCE prices, the Fed’s favorite measure in its appreciation of inflation. Fed of which many governors are expressed this week after the 25 basic points of federal guiding rates. His boss, J Powell spoke yesterday during the lunch presentation of the economic perspectives of the Grand Providence Chamber of Commerce, in Rhode Island.

J Powell, to the chagrin of Donald Trump, reaffirmed his prudent posture in the process under monetary easing.

The president of the American Federal Reserve (Fed) warned Tuesday against “too sustained” declines of guiding rates that would slip inflation, while a governor wants to strike hard and quickly.

“If we soften (monetary policy) in a too sustained way, we risk not achieving our objective in terms of inflation and having to reverse the trend thereafter to bring it fully to 2%,” he said. According to him, interest rates are currently “at the right level to react to potential economic developments”.

The Fed lowered its key rates last week for the first time of the year, a quarter of a percentage point. These rates, which guide borrowing costs, are now in a range between 4% and 4.25%. The primary motivation for this drop in rates was employment, whose signs of weakness are increasing.

“The observed deterioration is real and serious,” said Ecofi economists. “Employment creations have slowed significantly (only 29,000 on average over the last three months, compared to 232,000 in January 2025) or even have been almost non -existent in the so -called cyclical sectors in recent months. The annual revision of the figures made by the Labor Office (BLS) has also highlighted an overestimation of 911,000 jobs from March 2024 to March 2025. Hiring, resignation and layoffs.

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 1,1764 USD. The course of course in our Haussier scenario is 1,2465 USD. To preserve the committed capital, we advise you to position a USD 1,1607 protection stop.

The profitability hope of this Forex strategy is 701 pips and the risk of loss is 157 pips.

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