EUR/USD: Identification of a technical pivot zone

While the latest macroeconomic statistics suggest a prolonged pause in the Fed's monetary easing program, the dollar stopped losing ground against a euro supported by a renewed appetite for risk, fueled by Nvidia's quarterly results. A barometer of the health of the AI ​​megatrend, Nvidia's stock price alone has an impact on risk appetite across financial markets as a whole.

"Nvidia's share price has fallen considerably over the past six months, despite a 50% upward revision of earnings. The debate is therefore less about the excellent short-term results and more about the viability of capital expenditures on AI, given concerns about its scale, monetization, and deteriorating cash flow. Nvidia's muted reaction to exceptional forecasts, such as those of last quarter, reflects this ongoing debate," says Richard Clode, portfolio manager at Janus Henderson.

Ultimately, the group exceeded expectations without really causing a stir on Wall Street, with the stock rising 1.3% in pre-market trading.

On yesterday's economic front, the final consumer price data for the Eurozone remained unchanged from the initial estimates, at +2.1% year-on-year, excluding volatile items (food, energy, alcohol, and tobacco).

This report was a pleasant surprise, as it contradicted recent signs of a deteriorating job market, evident at the end of last year. Average hourly earnings rose by 0.4% (0.3% according to the consensus forecast), and the unemployment rate fell to 4.2% of the labor force, compared to expectations of a stable 4.3%. Finally, private sector job creation came in at 130,000, double the median analyst forecast. The market immediately postponed the prospect of a federal interest rate cut from June to July.

Right now, the EUR/USD is trading at $1.1777.

KEY TECHNICAL ELEMENTS
The Chadburn line has repositioned itself on "Standby," as the 20-day moving average (dark blue line) failed to provide the necessary support, leaving the door open for a long consolidation towards the 200-day moving average (brown line). This underlying trend line, while still bullish, is gradually losing momentum. Currently, the currency pair is attempting to find support at the pivot zone identified at $1.1765.

MEDIUM-TERM FORECAST
Based on the key technical factors mentioned above, our medium-term outlook for the EUR/USD is neutral.

We will maintain this neutral outlook as long as the EUR/USD exchange rate remains between the support level at $1.1765 and the resistance level at $1.1935.