(News Bulletin 247) – In a foreign exchange market that remains largely “driven” by American inflation, the Euro/Dollar currency pair retreated after regaining contact with perfect parity.
“The longer inflation remains high over time, the greater the risk of it becoming entrenched. In response, the Fed will have to be even more hawkish to bring it down to a more reasonable level”, for Alexandre HEZEZ , strategist of the Richelieu group. “Consumption is resisting for the moment. It is even resisting too much for the Federal Reserve, which wishes at all costs to slow inflationary catalysts in all their forms despite the “pain” that these could cause. solidified their financial situation during the pandemic due to public transfers, the accumulation of forced savings and a robust labor market.
Employment will be discussed tomorrow, with the NFP report (No Farm Payrolls), traditional monthly federal employment survey, whose robustness we will gauge, but also its degree of tension, itself a source of inflation. Yesterday the ADP (Automatic Data Processing) survey constituted its traditional “taste”. The private human resources firm highlights 208,000 job creations in the private sector (excluding agriculture), against a target of 200,000.
To follow at 2:30 p.m. weekly registrations for unemployment benefits.
At midday on the foreign exchange market, the Euro was trading against $0.9880 about.
KEY GRAPHIC ELEMENTS
We resume our bearish work on the Euro/Dollar currency pair, with a suitable entry point, following pullback on parity AND 50-day moving average. With the advantage of having a level of stop-loss clearly defined.
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) parity.
Our entry point is at 0.9885 USD. The price target of our bearish scenario is at 0.9501 USD. To preserve the invested capital, we advise you to position a protective stop at 1.0001 USD.
The expected return of this Forex strategy is 384 pips and the risk of loss is 116 pips.
CHART IN DAILY DATA
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