EUR/USD: A rebound already thwarted

(News Bulletin 247) – The Euro was already seeing its premature rebound against the Dollar thwarted on Thursday by a fourth leak detected on the NordStream 1 and 2 gas pipelines. A “deliberate act” is privileged here, for what would constitute the symbol of a diplomatic, energy and environmental crisis. Not enough to plead immediately for a lasting rebound on the single currency. However, the balance of power is momentarily found on the currency pair in the sense that the ebb in US government bond yields, which allowed Wall Street to rebound, does not “pull” the greenback in the immediate future. . Greenback which keeps its safe haven clothes more than ever…

And the underlying trend remains that of an increase in the “remuneration” differential between the two currencies, to the benefit of the dollar. And this because of the difficulty of the monetary policy, even bellicose, of the Fed, to curb inflation. “Employment remains dynamic and will propel wages to ever higher levels,” explain the strategists at Pictet AM. “People saved heavily during the health crisis, and consumers can accept price increases. More importantly, rents are expected to continue to rise at a high rate. a rise in rents. This correlation is not perfect, but sufficient to suggest that rents will rise sharply in 2023. Indeed, the price of real estate has jumped by more than 30% since the start of the pandemic.

To be continued To be followed in priority on the statistical agenda this Thursday, the weekly registrations for unemployment benefits and the final data of Q2 GDP at 2:30 p.m.

At midday on the foreign exchange market, the Euro was trading against $0.9675 about.

KEY GRAPHIC ELEMENTS

While volatility has exploded since the last passage below parity, it is precisely the moment of reason to keep and avoid getting carried away by the temptation to reinforce its bearish positions on the currency pair, which can trigger any time the counterintuitive formation of a challenging move, heading towards its remarkable 20-day moving averages (in dark blue) at first.

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 0.9675 USD. The price target of our bullish scenario is at 0.9999 USD. To preserve the capital invested, we advise you to position a protective stop at 0.9589 USD.

The expected return of this Forex strategy is 324 pips and the risk of loss is 86 pips.

CHART IN DAILY DATA

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