EUR/USD: Rebound in protest

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(News Bulletin 247) – Short technical rebound of the Euro since the quite relative relief caused by the first round of the French presidential election which will see a decision in two weeks between the current President E. Macron and the candidate of the National Rally, Mr. Le Pen. Two opposing visions of Europe, then. The scenario of a duel between M Mélenchon and Ms Le Pen, ie two eurosceptic candidates is thus swept away. The Euro was trading at midday at $1.0930 approximately.

The background framework remains dominated by inflationary issues on both sides of the Atlantic and the consequences of the war in Ukraine.

As a reminder, the greenback benefited all last week from the resolutely more offensive tone on the part of the Fed. It is actually the whole question of the probability of a soft landing that is posed. “During his speech on price stability, Jerome Powell recognized that the current context did not make a ‘soft landing’ for the economy obvious”, noted the strategists of Lazard Frère Gestion in a note on the situation. “In other words, the Fed may need to implement a very sharp slowdown in growth to ease labor market tensions and stem inflationary pressures, which continue to build.”

An offensive tone, but not yet aggressive, which raises questions on this side of the Atlantic as well. “While inflationary tensions are expected to persist, the ECB will have”, according to Thomas Giudici, co-head of bond management at Auris Gestion, “no other choice than to accelerate the normalization of its monetary policy, probably more quickly than the market anticipates, with a rate hike starting in September.” As a reminder, the ECB is completing a meeting of its Board of Governors this week.

In terms of statistics, only the inventories of American wholesalers were on the agenda on Friday, up 2.5% in February on a monthly basis, somewhat missing expectations. To follow in priority, on the agenda this Monday, the speech of Bowman (member of the Board of the Fed) at 3:30 p.m.

KEY GRAPHIC ELEMENTS

With 5 red-bodied candles from March 1 to 7, and continued selling mobilization in week 09, the picture remains gloomy. Especially since the exit of a bevel (wedge) from below was fully validated from 04 to 07 April. But in the immediate future, a protest reaction is underway, a reaction that may lead to a chart rejection at 1.1000. In the absence of a suitable entry point, traders will prefer to stay out of the spot immediately.

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 maintain this neutral opinion as long as the Euro Dollar (EURUSD) parity prices are positioned between the support at 1.0848 USD and the resistance at 1.1000 USD.

CHART IN DAILY DATA

©2022 News Bulletin 247

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