(News Bulletin 247) – Same about-face on the Euro / Dollar as on the American equity markets, with Thursday a complete retracement of the gains made the day before, at the end of the meeting of the Fed’s Monetary Policy Committee , a meeting which, as a reminder, resulted in an increase of 50 basis points in Fed Funds. If future rate hikes of an equivalent magnitude are on the table, J. Powell made it clear that increases of a greater magnitude (75 bps) were not “actively considered” by the members of the Board. A less aggressive tone than the market had feared since the beginning of the week, and which allowed – only for a time – an easing movement on government bond yields. The Treasuries 10 years have since crossed the symbolic bar of 3% and are consolidating above.
A less aggressive but “hawkish” tone all the same: “Comments on the labor market, with record levels of job vacancies and the ratio of job openings to unemployed, have […] contributed to this “hawkish” tone”, notes Vincent Manuel, Chief Investment Officer, Indosuez Wealth Management. Employment will be discussed this Friday at 2:30 p.m. (Paris time) with the publication of the federal NFP report for the month of April The consensus is counting on a further contraction in the unemployment rate to 3.5% of the active population, 390,000 job creations in the private sector (excluding agriculture), and a monthly increase of 0.4% in the average hourly wage.
To be complete on the statistical front on Friday, the Euro is also under pressure from the very disappointing German industrial production figures (-3.9% in March month-on-month), completely missing the target.
At midday on the foreign exchange market, the Euro was trading against $1.0560 approximately.
KEY GRAPHIC ELEMENTS
While the underlying bearish bias remains on the currency pair, the entry point is no longer optimal since the start of a rebound yesterday after the Fed’s decisions and the press conference. Forex traders will therefore prefer to stall, waiting for a much more interesting entry point.
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 1.0454 USD and the resistance at 1.0758 USD.
CHART IN DAILY DATA
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