EUR/USD: The recurring pressure of the 50-day moving average

(News Bulletin 247) – The rebound of the Euro, which began on technical criteria from parity (July 15), took shape by experiencing an extension (August 10), with the support of more accommodating comments from of the Fed, with a slight deceleration in inflation on the other side of the Atlantic. The resumption of contact with the 50-day moving average (in orange) is however cruel.

“Although the odds of a 75bp hike for the September FOMC have since rebounded nicely, markets remain focused on the possibility that inflation will peak and Jerome Powell’s pivot is already in place,” according to the reading of Vincent Boy (IG France).

In the statistical chapter on Friday, to report a marked improvement in the morale of American households in August to 55.1 points (U-Mich, preliminary data), due to the prospects for improvement on the inflation front, in particular among low- and middle-income consumers for whom inflation is particularly important. A clearing which contrasts with the statistics for the month of June which had then reached its historic low.

At midday on the foreign exchange market, the Euro was trading against $1.0200 about.

KEY GRAPHIC ELEMENTS

The bearish message is immediately reinforced by the attitude of the spot in contact with the 50-day moving average (in orange), resistance since February 23.

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 1.0189 USD. The price target of our bearish scenario is at 1.0001 USD. To preserve the invested capital, we advise you to position a protective stop at 1.0256 USD.

The expected return of this Forex strategy is 188 pips and the risk of loss is 67 pips.

CHART IN DAILY DATA

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