(News Bulletin 247) – The Euro was based on perfect parity with the Dollar, a first in almost 20 years, while fears of an entry into recession in the Euro Zone and the United States are taking on more substance, against a background runaway inflation. The Dollar fully regained its safe haven attributes as the mood deteriorated in the markets.
“Regarding energy issues, the Nord Stream 1 gas pipeline between Russia and Europe will be shut down for 10 days. […] due to maintenance with the risk that flows will not pick up or only very little… which would once again increase the pressure on Europe,” notes Thomas Giudici, co-head of bond management at AURIS gestion.
“Central bankers, faced with so many uncontrollable elements, must certainly think about what Epictetus summed up as follows: “Among the things that exist, some depend on us, others do not”. Will they be wise and measured in their action? … »
In the immediate term, traders took notice of Germany’s ZEW Business Sentiment Index at -53.8, completely missing already pessimistic expectations, plunging to the lowest since December 2011. gases are naturally no strangers to this.
ZEW Chairman, Professor Achim Wambach, provided the following additional insights: “The main current concerns regarding Germany’s energy supply, the interest rate hike announced by the ECB and the new pandemic-related restrictions in China have led to a considerable deterioration in the economic outlook. Experts assess the current economic situation significantly more negatively than in the previous month and have further revised down their already unfavorable forecasts for the next six months. Expectations for energy-intensive and export-oriented sectors of the economy have particularly fallen, and private consumption is also assessed as significantly weaker. »
At midday on the foreign exchange market, the Euro was trading against $1 about.
KEY GRAPHIC ELEMENTS
An attitude “contrarian” is to be adopted to play the scenario of a powerful rebound in the direction of the 50-day moving average (in orange), without calling into question the underlying bearish framework.
MEDIUM TERM FORECAST
In view of the key graphic factors that we have mentioned, our opinion is positive in the medium term on the Euro Dollar (EURUSD) parity.
Our entry point is at 1.0065 USD. The price target of our bullish scenario is at 1.0349 USD. To preserve the invested capital, we advise you to position a protective stop at 0.9999 USD.
The expected return of this Forex strategy is 284 pips and the risk of loss is 66 pips.
CHART IN DAILY DATA
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