EUR/USD: J. Powell to speak today

The EUR/USD was quietly consolidating around $1.0673 at midday, ahead of a speech by Powell. The Fed Chairman is scheduled to deliver a keynote speech at the Division of Research and Statistics Centennial Conference in Washington. The opportunity to find out more about the Institution's intentions even though bond yields fell significantly at the end of last week, in particular due to the publication of the report on private employment.

This NFP report, combined with the confirmation of a slowdown in activity in services, contributed to a decline in the American 10-year yield with the corollary of a strong reaction from risk assets, with the notable exception of crude oil.

"The Fed's patience seems, in any case, to be paying off since the majority of macroeconomic indicators published last week in the US came out below expectations and confirm the slowdown of the American economy." says Thomas Giudici, head of bond management at Auris Gestion.

"As for the job market, when Powell indicated during the FOMC meeting that it remained tense, although rebalancing thanks to the increase in the participation rate, job creation in October disappointed and the unemployment rate increased by 0.1 point to 4%. Although still historically low, this rate is the highest since early 2022. At the same time, wage pressures are also less strong. This employment report confirms therefore a less tense labor market, an essential element for a lasting reduction in inflation.?

Not much to eat since the start of the week on the macroeconomic publications front. The producer price index in the Eurozone came out perfectly on target. We will also note the publication, a few moments ago, of a slightly heavier deficit than expected in the trade balance for the month of September (-$61.6 billion). Note that retail sales in the monetary union, for the month of September, were down 0.3%, more in the red than the consensus would suggest.

J Powell's speech is today at 15:15 (European time).

Right now, the EUR/USD is trading at $1.0673.

KEY GRAPHIC ELEMENTS
The 20-day moving average (in dark blue) is in phase, at a significant angle, to reconquer the 50-day long moving average (in orange), even though these two trend lines have not met since 17 August. The bearish message is therefore no longer so clear. The neutral opinion will be kept immediately.

MEDIUM TERM FORECAST
Considering the key graphical factors that we have mentioned, our opinion is neutral in the medium term on the EUR/USD.

We will maintain this neutral opinion as long as EUR/USD prices are positioned between support at $1.0550  and resistance at $1.0792.