EUR/USD: Neutrality remains

The services PMIs published Tuesday confirmed a slowdown in economic momentum in the United States, with the ISM index at 50, close to stagnation, accompanied by a sharp weakening of the employment component and a surge in input costs, reinforcing the risk of stagflation. Meanwhile, new industrial orders in Germany declined for the second consecutive month, penalized by the fall in foreign demand, in a context of tougher trade policies led by Washington. New US tariffs, which will reach up to 40% on certain imports as of August 7, are weighing on the business climate and adding a level of uncertainty that is dampening risk appetite. Currency traders now anticipate a probability of more than 90% of monetary easing by the Fed in September, with up to 130 basis points of rate cuts by 2026 according to futures markets. However, contradictory statements from FOMC members and the lack of consensus on inflationary pressures make the direction of monetary policy uncertain in the short term. In this unclear environment, the euro-dollar appears to be in a sideways consolidation phase, with traders in a wait-and-see position ahead of the release of US inflation figures next week. The euro-dollar is operating in a relatively neutral technical configuration, awaiting a clear catalyst that could trigger a directional move. After a sharp rebound on Friday following a very disappointing US jobs report, the pair stabilised around 1.1565, failing to extend the upward momentum.

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

We will maintain this neutral opinion as long as the EUR/USD is positioned between the support at $1.1460  and the resistance at EUR/USD1.1674.