(News Bulletin 247) – Between two major publications today, namely inflation in the Euro Zone and the federal report on employment in the United States, the Euro / Dollar continued to reflect the great caution of operators, the spot remaining compressed at the end of the bevel, around $1.1050 for one euro.
EuroStat has just confirmed the fears expressed earlier in the week by Ms. Lagarde, namely a sharp acceleration in inflation with the specter of a contraction in the pace of economic growth in the context of major geopolitical tensions with Russia. On an annualized basis, prices in the broadest basket of products jumped 7.5% in March, well above expectations. And this against 5.9% in February. In detail, “with regard to the main components of inflation in the euro zone, energy is expected to experience the highest annual rate in March (44.7%, compared to 32.0% in February), followed by food, alcohol & tobacco (5.0%, compared to 4.2% in February), industrial goods excluding energy (3.4%, compared to 3.1% in February) and services (2. 7%, compared to 2.5% in February), “says the statistical institute.
Another topic of interest for forex traders today: the NFP report (for Non Farm Payrolls), monthly employment report for the month of March. The opportunity for the Fed to further assess the dynamics of tensions in the labor market. The consensus is targeting nearly 500,000 job creations in the non-agricultural private sector and a contraction of the unemployment rate to 3.7% of the active population.
“It is especially in the United States that the concern is manifested. The increase in wages linked to full employment is well under way even if a slight inflection has been observed very recently. And, when the prices of raw materials will bend , real estate prices will take over. The shortage of housing makes this prospect inevitable,” for Emmanuel Auboyneau, Managing Partner Amplegest.
Also to be monitored at 4:00 p.m. is the ISM manufacturing PMI activity indicator.
At midday on the foreign exchange market, the Euro was trading against $1,1050 about.
KEY GRAPHIC ELEMENTS
As long as the spot quotes above $1.10, the supply of oxygen is assured. On this side, there is no lack of technical arguments to justify the taking of selling positions. In the immediate future and in the absence of an interesting chart entry point, traders will avoid exposure. Regarding the substantive work matrix, it remains unchanged. The transition phase between February 4 and 23, in the form of a slip without federation, under the 100-day moving average (in orange) is over. The underlying bearish bias aligns with the short term, and the plot of a candle conspicuous by its red body on Thursday 2/24 illustrates the firm grip of the selling side. With 5 red-bodied candles from March 1 to 7, and continued selling mobilization in week 09, the picture remains gloomy. The confirmation of the formation of a bevel (wedge) is in progress. A navigation within it is still to be expected. We will therefore monitor its two terminals, represented in black on our graph.
MEDIUM TERM FORECAST
In view of the key graphic factors that we have mentioned, our opinion is neutral in the medium term on the Euro Dollar (EURUSD).
We will keep this neutral opinion as long as the Euro Dollar (EURUSD) parity prices are positioned between the support at 1.1000 USD and the resistance at 1.1140 USD.
CHART IN DAILY DATA
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