(News Bulletin 247) – The Euro/Dollar did not develop a lasting protest rebound last week, after an FOMC deemed less aggressive than expected. A less aggressive tone but “hawkish all the same: “The comments on the job market, with record levels of vacancies and the ratio of job openings to unemployed, have […] contributed to this “hawkish” tone”, notes Vincent Manuel, Chief Investment Officer, Indosuez Wealth Management.
The employment report, precisely, published on Friday (NFP report) will have shown signs of relative appeasement. In detail, it is a relative relief that emerges on this point, with an unemployment rate that remains almost stable at 3.6% of the working population (3.4% expected) and a rise in average hourly wages contained, at + 0.3%. Finally, the American economy created 428,000 jobs in the private sector (excluding agriculture).
Currency traders will naturally continue to monitor two major events, whose influence on inflation is intense: the war in Ukraine on the one hand, and the confinements in China, causing a sharp brake on the production capacities of “the ‘factory of the world’. After Shanghai, it is the capital, Beijing, which is faced with an epidemic wave, immediately followed by drastic containment measures, in application of the “Zero Covid” policy decided by the authorities.
For the time being, currency traders have just learned of the Sentix index of investor confidence in the Euro Zone, which continued to contract, sinking further into negative territory, at -22.6, missing expectations. As a reminder, the Sentix Economic Index is calculated monthly from a survey of more than 5,000 private and institutional investors on their assessment of the economic situation and their economic expectations for the next 6 months.
At midday on the foreign exchange market, the Euro was trading against $1.0520 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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