No Surprise The information presented in this publication is provided purely for informational purposes and does not constitute investment advice, an offer to sell, or a solicitation to buy, and should not in any way be used as a basis or considered as an incentive to engage in any investment. The macro point No SurpriseMacro OverviewLast week, central banks responded in line with expectations, resulting in reduced volatility in the major currency pairs. The European Central Bank kept its monetary policy unchanged while revising its macroeconomic forecasts upwards. The overall asset purchase program remains unchanged. However, the monthly purchase volume is reduced in the short term due to improved economic and financial conditions. Indeed, there is no particular tension in the financial markets. Highly indebted companies and States can finance themselves at very low rates to roll over their debt. Issues of friction among members of the central bank's Governing Council will be discussed later. This particularly concerns the continuation of emergency monetary measures implemented since March 2020, which will expire at the beginning of 2022.No surprise either from the Bank of Canada, which maintained its monetary policy as expected by currency traders. The main policy rate is at a low point of 0.25%. The asset purchase program continues at the same pace, at 2 billion CAD per week. A downward adjustment could take place by the end of the year according to economists' consensus. The central bank did not want to interfere with the general election taking place on September 20. The impact of the meeting was marginal on the EUR/CAD.On the macroeconomic front, statistics published during recent sessions confirmed the major trends outlined last spring. In Europe, supply chain difficulties and rising commodity prices continue to hinder economic activity, especially in the construction sector. In most major European countries, with the notable exception of the United Kingdom, construction activity was contracting in August. Nevertheless, the outlook remains good. The construction sector is often closely monitored as it is a good leading indicator of the economy, particularly in the French case.In the United States, the labor market remains on a positive trend. According to the JOLTS survey (Job Openings and Labor Turnover Survey) published with a delay and concerning July, new job openings reached a record 10,934,000 compared to a consensus of 10,030,000. This record was set before the new wave of Covid emerged and many employers began requiring proof of vaccination. Given the high level of job openings and the difficulties observed in certain sectors in quickly finding employees (the restaurant industry, for example), it is likely that the wage increases observed since spring will strengthen in the short term. The risk for the American economy is having a price-wage spiral, leading to a more prolonged than desired rise in inflation. This would seriously complicate the task for the Federal Reserve. We are not there yet. Technical point In the currency market, volatility was reduced in the main pairs, as mentioned in the introduction. For example, the EUR/USD only moved 15 basis points following the ECB's announcement last Thursday. In the short term, the pair should continue to move within its range of the last month, between 1.17 and 1.19. The EUR/CHF struggles to escape the 1.0900–1.0950 level which could mark a lasting trend reversal for the pair. As long as the EUR/CHF remains below this price range, the underlying trend is bearish. Finally, very little volatility also on the EUR/GBP, which remains within the same range as in past weeks, between 0.85 and 0.86. We are facing a cautious forex market. The supports and resistances listed below indicate respectively the low and high points within which prices should evolve during the week.SUPPORTSWEEKLYRESISTANCESWEEKLYS2S1R1R2EUR/USD1.17001.17301.19001.1983EUR/GBP0.84680.84930.85960.8621EUR/CHF1.06421.07721.09061.0957EUR/CAD1.47541.48181.51001.5171EUR/JPY127.42128.00130.91131.51For personalized advice on trends and currency hedging, contact our trading desk: Announcements to follow It is a transition week for traders, ahead of the Federal Reserve meeting on September 21 and 22. The issue will be the timing of tapering (asset purchases reduction, in French). Following the disappointing August job creation figures in the United States, the consensus of economists believes that the announcement will be postponed to November. We will know more next week. In the immediate future, attention will focus mainly on August inflation figures in the main economic areas (United States, United Kingdom, and the eurozone). This is a 2nd estimate with a weak impact on exchange rates. It is unlikely that macroeconomics will drive the currency market this week. It will probably be more technical analysis, hence the importance of becoming aware of the technical levels (supports and resistances) discussed above. Below you will find the publications and events that should have a major impact on the evolution of currency rates.DAYTIMECOUNTRYINDICATORWHAT TO EXPECT?09/1414:30Core CPI (August)Stable at 0.3% month-on-month.09/1508:00Core CPI (August)Increase to 2.3% year-on-year.09/1614:30Philadelphia Fed Manufacturing Index (September)Consensus projects an increase to 23.0 from 19.4 previously.09/1711:00CPI (August)In the second estimate, inflation in August is expected at 3.0% year-on-year.Did you like this content? Share it!