EUR / USD: Unidirectional

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(News Bulletin 247) – Weakened by the prospect of a tightening of restrictive measures to fight against a new wave of Covid-19 contamination in Europe, the Euro continued its slide against a Dollar finally supported by the renewal of J. Powell at the head of the Fed, the current President being considered a little less “dove” than Lael Brainard, who was also in contention. She will occupy the post of Vice-President.

In the immediate future, traders will have to deal with a battery of major US statistical indicators on Wednesday, indicators whose publication is “grouped” before the departure on vacation of many operators for the Thanksgiving holidays. On the menu: weekly registrations for unemployment benefits, quarterly GDP and PCE (personal consumption expenditures), the Fed’s preferred measure of inflation. The traditional Minutes of the Institution will also be published for durable goods orders. And this before Black Friday, the traditional kick-off for end-of-year purchases in the land of consumerism.

Yesterday, operators took note of the very first estimates (flash data) of PMI activity indicators (surveys of purchasing managers). Both services and industry exceeded expectations at 56.6 and 58.6 respectively. Chris Williamson, Chief Business Economist at IHS Markit, however, provided the following necessary insights: “If, contrary to the expectations of economists, activity growth strengthened in November in the private sector in the euro area, a slowdown expansion throughout the fourth quarter seems inevitable, particularly given the rise in Covid-19 cases and the risk that this resurgence of the pandemic poses to the economy in December. “

While waiting for the salvo of American publications this afternoon, the Euro is paying for the publication of a slightly stronger than expected decline in the IFO business climate index in Germany, the leading economic power in the Eurozone. The service component, in particular, “has deteriorated significantly. Skepticism has increased significantly, especially with regard to respondents’ expectations. The last time the expectations indicator fell so sharply, it was was in November 2020. Service providers were also less satisfied with their current situation. The fourth wave of coronavirus has lowered expectations, especially in the tourism and hospitality sectors. “

Geopolitics also weighs on the risky asset that constitutes the Euro: “The emerging risks of an invasion of Ukraine by Russia worry the authorities in Europe and the United States”, warns Vincent Boy (IG France) . “The position in the face of this is difficult for European countries because of their dependence on Russian gas, when prices are already very high. An intervention could lead to a stop or a decrease in gas deliveries and put a little more price pressure. “

At midday on the forex market, the Euro was trading against 1,1210$ about.

KEY GRAPHIC ELEMENTS

We clarified on Wednesday 10/11 the following elements, as a reminder: “A break of a fragile support zone at 1.1530 would increase volatility. The working band between $ 1.1530 and $ 1.1675 would then be obsolete.” This zone gave way, with validation by volatility. The current seller is strengthened, and the consequences are still being expressed. Next bearish target locked at $ 1.1100. As a result, a sharp punctual reaction of protest will have to be considered.

MEDIUM-TERM FORECAST

In view of the key graphical factors that we have mentioned, our opinion is negative in the medium term on the pair Euro Dollar (EURUSD).

Our entry point is at 1.1216 USD. The price target for our bearish scenario is at 1.1001 USD. To preserve the committed capital, we advise you to position a protective stop at 1.1301 USD.

The expected return on this Forex strategy is 215 pips and the risk of loss is 85 pips.

DAILY DATA CHART

EUR / USD: Unidirectional (© ProRealTime.com)

©2021 News Bulletin 247

Source: Tradingsat

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