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#1 28-11-2022 14:39:49

Admin & Trader
From: Paris - France
Registered: 21-12-2009
Posts: 3421

EUR/USD: finally, the return of hints and cues on the US side

EUR/USD: finally, the return of hints and cues on the US side

Against a backdrop of reduced risk appetite with the clashes in China between exasperated civilians and police, the Euro paradoxically gained a few pips against the USD, in a market lacking hints from the US. It must be said that since Thursday, traders have only had half a session on Wall Street, which was largely deserted. The main statistical event this week is not expected until Tuesday: the Conference Board's consumer confidence index, which is expected to fall to 100 points.

The main issue for traders remains the identification of a neutral rate for the Fed, and the shape of the Fed Funds curve. Probably flatter, if we are to believe the inflections of language contained in the Minutes of the November 1 and 2 meetings.

As a reminder, the neutral rate is a construct: it is the key rate above which the Fed, or any other central bank for that matter, causes a slowdown in activity. Below this level, the economy continues to "warm up". The neutral rate is the one that best allows the Fed to achieve its two main objectives: full employment and a 2% inflation target.

In the Eurozone, the situation remains fragile, particularly with regard to the pressure of the energy component on inflation. "Commodity prices remain high, the shadow of an energy crisis still hangs over Europe and poses many risks to growth in the eurozone," warn the strategists at Lazard Frères Gestion.

Right now, the EUR/USD is trading at $1.0443.

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.

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.

"Anything worth having is worth going for - all the way." - J.R. Ewing



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