(News Bulletin 247) – The rebound of the Euro against the Dollar, which began on May 13 in significant volatility, unsurprisingly found in the 50-day moving average (in orange, still bearish), an important confrontation zone, triggering technical signals approaching one (if not THE) statistical release of the week, namely PCE prices (for personal consumption index). That is to say, the measure of choice, even more than the CPI (consumer price indices) for the Fed in reading and analyzing inflation, an essential working basis in the construction of its monetary policy. . This desire to control inflation obviously remains at the heart of its priorities. “The American institution will continue […] to increase its rates as much as necessary, in an approach that is still just as “data dependent”, until inflation decreases in a “clear and convincing way”, for Sébastien GRASSET (Auris Gestion).
The whole question is to what extent the aggressiveness of US monetary policy will affect growth. “While the negative impact on growth of such a tightening is beyond doubt, the Fed Chairman continues to believe that a soft landing remains possible. Indeed, Jerome Powell considers the US economy to be particularly resilient with a low unemployment rate, solid consumption and healthy balance sheets and that it is therefore able to cope with a more restrictive monetary policy without the landing being too hard”, continues M GRASSET.
Yesterday in terms of statistics, the week, which got off to a gloomy start on this front across the Atlantic, continued without progress. The growth figures missed expectations with a contraction of 1.5% in preliminary data. In addition, jobless claims fell a little more than expected last week in the United States to 210,000 after 218,000 the previous week.
Also to follow this Friday the consumer confidence index (U-Mich) in revised data at 4:00 p.m.
At midday on the foreign exchange market, the Euro was trading against $1.0710 about.
KEY GRAPHIC ELEMENTS
the spot EURUSD is now back in contact with its 50-day moving average (in orange), a trend line with a steep downward slope. An interesting entry point for targeting a relapse of spot towards its annual lows, while keeping a nearby stop, is now clearing.
MEDIUM TERM FORECAST
In view of the key graphic factors that we have mentioned, our opinion is negative in the medium term on the Euro Dollar (EURUSD).
Our entry point is at 1.0716 USD. The price target of our bearish scenario is at 1.0455 USD. To preserve the capital invested, we advise you to position a protective stop at 1.0766 USD.
The expected return of this Forex strategy is 261 pips and the risk of loss is 50 pips.
CHART IN DAILY DATA
©2022 News Bulletin 247
I am currently a news writer for News Bulletin247 where I mostly cover sports news. I have always been interested in writing and it is something I am very passionate about. In my spare time, I enjoy reading and spending time with my family and friends.
