Discrepancy The information presented in this publication is provided purely for informational purposes and does not constitute investment advice, a sales offer, or a solicitation to purchase, and should not in any circumstances serve as a basis or be considered an incentive to engage in any investment. The macro point It has already dropped significantly for EUR/USD (-2.4% since the beginning of the year). In the short term, it is unlikely to go much lower. The negative news on the European front is already priced in. Most importantly, the options market seems to believe that the recent weeks' decline has been too fast and that it will be difficult to go further down. American companies are currently releasing their quarterly results. It is generally a good barometer for understanding the state of the American economy. What we can already say is that it is going quite well. According to Bloomberg data, the sales of listed American companies are up by an average of 1.33% compared to the consensus. This is good. There's even better news. The average profits are 7.07% higher than expectations. The American consumer is still in good shape, despite real economic difficulties for a portion of the population (high inflation, multiple jobs, lack of credit access, etc.). The major macroeconomic indicators are also well oriented: productivity continues to grow, while it is declining in Europe, employment is strong, and the growth forecast for 2024 has been regularly revised upward by economists since the beginning of the year, currently at 1.2%. Conversely, for the eurozone, the growth forecast is at 0.8% for this year and might be revised downward. As often happens, there is a marked gap in the growth dynamic between the United States and Europe. On the European side, poor statistics accumulated last week. In France, the trade deficit reached almost 100 billion euros in 2023. This reflects a decline in manufacturing production and structural difficulties in the industry. This is accompanied, unsurprisingly, by losses in foreign market shares. In Germany, all segments of industrial production (energy, investment, consumption, etc.) are plummeting. Industrial production is 15% below its peak reached six years ago. The chemical sector is certainly the most penalized, with a collapse in production volume of nearly 25% since the end of 2021. The entire German economic model simply needs reassessment. However, there is a glimmer of hope. Germany has shown impressive agility in the face of headwinds. Following the war in Ukraine, the German defense industry succeeded in massively increasing its production capacity within a year – a challenge once thought impossible. Germany is currently the sick man of Europe. It is unlikely to be so in the coming years. We believe that Germany has an impressive rebound capacity. In Asia, Chinese deflation is the main focus. It will eventually also be an issue in Europe. Chinese inflation turned negative in January at -0.8% year-on-year. China has been in deflation for several consecutive months. The problem is that it is exporting deflation via trade and particularly through finished products like solar panels and electric vehicles (where there is overcapacity). This is already starting to impact raw materials (deflation leads to a drop in industrial metals, for example). A few weeks ago, many feared a resurgence of inflation due to disruptions in the Red Sea. The reality is that maritime freight represents only a tiny portion of inflation (about 1.5% of the consumer price index in developed countries). In reality, we should be more concerned about the risk of Chinese deflation, which is a symptom of a global economy marked by a decrease in demand, than the risk of a resurgence of inflation. A word on emerging countries. The cycle of quantitative easing continues. It began last year. Last week, it was the Czech Republic's turn to lower its main policy rate by 50 basis points. This is allowed by inflation being completely under control. We expect the Czech central bank to cut rates by at least 350 basis points this year (this is in line with consensus estimates). This should continue to support the rise of the EUR/CZK (euro/Czech koruna) pair. Technical point On the foreign exchange market, the trend is of course bearish for the EUR/USD (a drop of 2.4% since the beginning of the year). But the potential for further decline is certainly limited in the short term. The bad news on the European front is already priced in. Moreover, and perhaps most importantly in our view, the options market seems to think that the recent decline has been too rapid and that it will be difficult to go lower. This is a good short-term indicator. The most likely scenario is that the EUR/USD pair will move within a range in the coming weeks. For other major pairs we follow, there is no notable trend change. The EUR/JPY is still in an upward phase. The EUR/GBP pair remains anchored close to 0.85. Finally, the EUR/CHF should oscillate in the coming weeks between 0.93 and 0.95 (difficult to go higher immediately). The supports and resistances displayed below respectively indicate the low and high points within which prices should move during the week.Weekly SupportsWeekly ResistancesS2S1R1R2EUR/USD1.06001.06231.08611.1001EUR/GBP 0.84000.83900.86160.8655EUR/CHF 0.92110.92890.94990.9561EUR/CAD 1.43011.44001.46551.4751EUR/JPY 159.01160.09162.99163.09 Announcements to follow It's a particularly quiet week on the statistics front with inflation numbers for the US economy. Unsurprisingly, disinflation should continue. We doubt this data will exert any real influence on exchange rates and monetary policy. The challenge for the Federal Reserve (Fed) is mainly to ensure that inflation subsides in the long term. So far, that's the case. In the background, we will monitor the US electoral process. Increasing questions are arising regarding President Joe Biden's mental health, who is 81 years old. We doubt he will be pushed to withdraw from the presidential race by the Democratic Party. But it's a possibility that cannot be completely excluded... In any case, the topic deserves particular attention. Below are the publications and events that should have a major impact on currency fluctuations.DayTimeCountryIndicatorWhat to expect?02/13/202414:30USAConsumer Price Index (January)Previous at 3.4% year-on-year. 02/14/202408:00UKConsumer Price Index (January)Previous at 4.0% year-on-year.02/15/202414:30USAPhiladelphia Fed Manufacturing Index (February)Previous at -10.6.02/16/202414:30USAProducer Price Index (January)Previous at -0.1% month-on-month.