(News Bulletin 247) – Still in a fundamental downward trend, the Euro recovered somewhat against the Dollar, regaining some oxygen thanks to the opening of the ball of good quality quarterly in Europe, leading to a rebound in the main stock exchanges in the Euro Zone, namely Frankfurt, Paris and Amsterdam. Note the quarterly copies of Danone, Heineken and ASML, which were very well received.
The working matrix of the Euro/Dollar currency pair remains the same, with a Fed that is much more willing and firm than the ECB. European Central Bank which ended a new meeting of its Board of Governors on Thursday. The “turn of the screw” was only “verbal” in the words of Ronan Blanc, Manager Analyst at Financière Arbevel.
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”.
Currency traders will naturally continue to follow developments in the war in Ukraine, which is taking a turn as the Russian offensives in the Donbass intensify. “As European countries gradually reduce imports of Russian oil, President Putin has threatened to redirect energy exports from the West to Asia. He also spoke of “unforeseeable consequences” if the United States continues to provide military support to Ukraine,” said César Perez Ruiz, Chief Investment Officer and CIO at Pictet Wealth Management.
The Euro/Dollar currency pair also included a share of risk as to the still uncertain outcome of the presidential election in the second power of the Euro Zone, France, an election which in the second round opposes the outgoing President, E. Macron (progressive) to M. Le Pen (sovereignist, eurosceptic). The two candidates will face each other this evening in the traditional televised debate between the two rounds.
In terms of statistics, not much to get your teeth into yesterday, apart from housing starts and building permits for housing in the United States, which came out above expectations. To follow the stocks of American crude at 4:30 p.m. This morning was published the monthly trade balance deficit in the Euro Zone, at -9.4 billion euros for the month of March, against a target of -6.5 billion euros.
At midday on the foreign exchange market, the Euro was trading against $1.0860 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 Wednesday.
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 1.0685 USD and the resistance at 1.1000 USD.
CHART IN DAILY DATA
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