© Reuters. EUR/USD, Euro-Dollar
After having stabilized since last night, after posting a net acceleration to the downside yesterday evening, the pair EUR/USD resumed its fall on Thursday afternoon, and has just touched the support of 1.1650.
The movement seems mainly related to a rebound of the greenback, even if the news has been busy since this morning.
As regards the statistics, we can see that inflation has been revised down in France for the month of June, 0% in monthly data, against 0.1% in the first estimate. Industrial production in the Euro Area has exceeded expectations, to +1.3% against +1.2% expected for the month of May.
One can also note the publication of the Minutes of the last meeting of the ECB in the early afternoon. This paper has recalled that, given the current uncertainty, it is prudent to estimate that the end of QE should depend on future economic data. In regards to the rate, the Minutes have repeated that they will remain at their current level for as long as necessary to push inflation towards the ECB’s target.
It should also be noted that the European Commission has announced a lowering of its growth forecasts for 2018 during the morning, anticipating now a rise in GDP of 2.1% against 2.3% earlier. The forecast 2019 remains unchanged at 2%.
In regards to the Fed, Mester was on the program this morning, and was of the view that the strength of the economy justifies two rate hikes of the Fed’s additional this year, underscoring a strong growth, low unemployment, and stable inflation.
Finally, it must not be forgotten that the trade war remains a sensitive topic that is likely to influence the markets at any time, with several more statements this morning, including that of Donald Trump who said, ” we are in a nasty (nasty) commercial battle with China “.
This statement came at the end of a busy morning for the US president, who has threatened to withdraw the United States from NATO, before getting a commitment on the part of other members of higher spending on defence.
From a graphical point of view, the pair EUR/USD confirm its bearish trend in the short term, after being stabilized just above 1.1665 after a new phase of decline yesterday evening. The EUR/USD is now facing a support at 1.1650, before 1.16, 1.1570, 1.1550 and 1.1500-10. Has the upside, only a return back above 1.17 will invalidate the bearish view in the short term at this stage.
Finally, we remind that it will still be necessary to monitor the CPI US 14: 30 in respect of the statistics potentially influential.