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#1 25-11-2022 13:23:50

johnedward
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From: Paris - France
Registered: 21-12-2009
Posts: 3421
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EUR/USD: a lack of hints from the US side

EUR/USD: a lack of hints from the US side


At the top end of the consolidation, the EUR/USD continued to illustrate the nervous wait-and-see stance, in the absence of any US benchmarks since yesterday. Wall Street remained closed for Thanksgiving, and will only reopen for a shortened session today. In other words, a very large proportion of investors aren't present. On the macroeconomic front, there is nothing to get excited about on the US side until the 29th and the Conference Board consumer confidence index.

In the meantime, traders continue to digest the publication earlier in the week of the Fed Minutes, the minutes of the monetary policy meeting of 1 and 2 November. The minutes were an opportunity to refine the neutral rate outlook and anticipate the future shape of the Fed Funds curve. While judging the need to continue the fight against inflation, the majority of members thought that the scenario of a slowdown in the rise in Fed Funds was "appropriate". A rising curve, therefore, but a little flatter, with an end point (terminal rate) that may be important.

In terms of statistics yesterday, currency traders were pleasantly surprised to see the IFO business climate index in Germany rise more than expected, to 86.4. IFO Director Klaus Wohlrab offered the following insight: "In manufacturing, the index rose sharply, companies were less pessimistic about the future, but in energy-intensive industries, uncertainty increased further. Expectations recovered somewhat, but remained deeply pessimistic."

Released early this morning, German Q3 GDP came in at a 0.3% quarterly increase, beating expectations. There were no other major macroeconomic figures on the agenda.

Right now, the EUR/USD is trading at $1.0364.

KEY CHART ELEMENTS
Volatility remains high on the spot market, which is tracing a broad consolidation, the structure of which remains to be defined, around $1.03. A continuation of these nervous oscillations is the preferred option, a scenario that is not very attractive for taking positions. We prefer to stay out of the spot for the time being.

MEDIUM-TERM FORECAST
Given the key chart factors we have mentioned, our medium-term view on the EUR/USD is neutral.

We will maintain this neutral view as long as the EUR/USD is positioned between support at $1.0175 and resistance at $1.0484.

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