EUR/USD: A dense economic calendar

Without direction, the EUR/USD remained close to its annual highs, with traders now trying to gauge the scope of the new Chinese package of measures to revive consumption. As a reminder, Beijing has just announced a set of measures to support the economy, particularly in real estate.

"The noise from sources "close to the discussions" has been intensifying since the start of the school year, suggesting the imminence of measures in the face of a slowing Chinese domestic economy", says Alex Baradez (IG France), who praises the major announcements, "the lowering of the prudential reserve ratio for Chinese banks", "the lowering of a short-term lending rate to banks (7 days)", support for the stock markets and real estate.

"Even if it is not a "bazooka", the measures taken by the Chinese authorities are relevant and targeted in relation to the difficulties the country has been facing for several years."

For many months, the market has been waiting for the Chinese government to deploy major measures to revive a flagging economy. The latest indicators published last week, whether retail sales or industrial production, have once again confirmed that the Chinese economy is slowing down.

"The next wave of easing will probably come from fiscal policy and housing policy, which could change growth forecasts and market sentiment, depending on the scale and effectiveness of the announcements," Allianz Global Investors economists suggest.

Because in the immediate future, "despite this latest initiative from the Chinese authorities, investors remain skeptical," tempers Gregoire KOUNOW, Advisor at Norman K. "Indeed, for many of them, the country's economic problems remain deep, with a real estate market on its last legs, domestic consumption down, rising youth unemployment, a return to price deflation and distrust of foreign investors stronger than ever."

In terms of stats, there was little to get our teeth into on Wednesday, although it is true that traders are already waiting for the publication of PCE prices on Friday, the Fed's preferred measure in its assessment of inflation. Let us mention new home sales, which happily crossed the 690K mark in August, beating the target.

Today, in the US: the quarterly GDP and weekly unemployment benefit registrations at 14:30 (EU time), as well as a speech by Powell, Chairman of the Fed at 15:20, at the opening of the US Treasury Market Conference in New York.

In addition to PCE prices, the statistical menu will be rich tomorrow with household income and expenditure, as well as the consumer confidence index (U-Mich).

Right now, the EUR/USD is trading at $1.1156.

KEY CHART ELEMENTS
The spot has once again weakened an oblique graphic support line, relaunching the idea of ​​the formation of a chart pattern. A clear break of this threshold would weaken the currency pair for the coming weeks. A neutral position is adopted while waiting, if necessary, for a signal.

MEDIUM-TERM FORECAST
In light of the key graphical factors 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 the support at $1.1012 and the resistance at $1.1250.