EUR/USD: A bit of immediate oxygen

by

(News Bulletin 247) – The rebound continues on the Euro / Dollar currency pair, against a backdrop of the start of a satisfactory quarterly ball in the Euro Zone, with national champions in France (Danone, L’Oréal, Teleperformance), Dutch (ASML , Heineken) or German (Continental). A bit of welcome respite, therefore, for the single currency in the short term, in a work matrix which remains however dominated by the attitudes of the major central banks on both sides of the Atlantic. The chances are strong of seeing the Fed “mark the blow” at the next FOMC, in reaction to galloping and chronic inflation. A 75 basis point scenario, admittedly much less likely, is not excluded.

“[Les deniers chiffres mensuels de l’inflation] still increasing the pressure on Jerome Powell and the FOMC, who were already facing dynamic price increases before the war in Ukraine, driven by strong demand and persistent global logistical problems, maintaining tensions on supplies and so the prices. The recent confinements in China continue to fuel this pressure”, for Alexandre Baradez, IG France. The Beige Book published yesterday abounds in this direction, particularly on the thorny issue of tensions in the labor market.

For its part, the ECB therefore continues to “take its time”, for Ulrike Kastens, Economist Europe, DWS. “Caught between high economic uncertainty and record inflation rates, it continues to be cautious. But at least it has decided to end net asset purchases in the third quarter of 2022. The ECB then made a point of stressing that it remains “data dependent”.

In the statistical chapter, to follow in priority, on the agenda this Thursday, the Philly Fed manufacturing index and the weekly registrations for unemployment benefits in the United States at 2:30 p.m.

At midday on the foreign exchange market, the Euro was trading against $1.0910 approximately.

KEY GRAPHIC ELEMENTS

Since its clear exit from a broad consolidation wedge on April 4, the selling side has been confident, with 7 red bodies over the last 8 candles drawn. A break of a fragile intermediate floor at $1.0850, which we described yesterday as a safeguard, would release additional selling energy, in a bout of volatility. This rupture is in progress, and requires validation. In the absence of an adequate entry point, traders will not take any position on Thursday.

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

You May Also Like

Recommended for you

Immediate Peak