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#1 30-11-2022 13:11:39

johnedward
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From: Paris - France
Registered: 21-12-2009
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EUR/USD: what's new with the pair?

EUR/USD: what's new with the pair?


The euro continued its consolidation phase, but not without nervousness around $1.0350, in a forex market focused on monetary policies on both sides of the Atlantic and the social situation in China.

"The markets are paying close attention to the speeches of central bankers, especially the indications of a terminal rate target and a monetary policy pivot," say ABN Amro's strategists. The latest Fed Minutes, while suggesting a slowdown in the pace of Fed Funds hikes, say nothing about the terminal rate, that end point at the top of the road. The extreme margins mentioned by James Bullard are 5% to 7%.

The Euro, a barometer currency of risk appetite par excellence, is influenced by the ebb and flow of fears about the demands (protest, dare we say it!), sometimes spilling over into clashes with the police, of a fringe of the population exasperated by the radical nature of anti-Covid laws.

However, the Chinese authorities have announced that they will speed up the vaccination of the elderly, while the low vaccine rate among citizens is one of the arguments used by Beijing to justify its zero-covid policy.

"The party could give in to the population and soften the anti-Covid measures, and in particular the zero-case policy, which has been in place in the country for far too long now," says Vincent Boy (IG France). In addition, the announcements of new support for the property market enabled the indices in China and Hong Kong to make strong gains at the end of the session [yesterday] morning.

In terms of Tuesday's stats yesterday, it was the Conference Board's consumer confidence index that focused attention, although it did not deviate significantly from the target, contracting to 100.3 points.

Right now, the EUR/USD is trading at $1.0369.

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 the $1.03 level. 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. The limits of the flag are clearly identified, between $1.0240 and $1.05.

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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