EUR/USD: US CPIs relieve selling pressure on the Euro


(News Bulletin 247) – The euro has regained ground against the dollar, in the wake of the publication of the latest US inflation figures (consumer prices), the content of which clearly suggested a narrowing of the trajectory of “remuneration” between the two currencies. At the very least, the hope of witnessing a gradual flattening of the shape of the curve of Fed Funds was clearly visible in the equity markets, especially in the US growth files. The Nasdaq Composite, in particular, jumped more than 7%.

In detail, prices, in their broadest sense, including energy and food, rose 7.7% at an annualized rate, against 8.2% last month, and 7.9% expected, according to the latest figures from the Census Bureau. , in seasonally adjusted data. Excluding volatile elements (food and energy), prices rose by 6.3%. What bring a certain relief on the markets, suggesting a relative softening of the tone of the Fed for its next monetary maturities, at least a slowdown in the pace of tightening of the monetary tap.

10-year federal sovereign bond yields (Treasuries 10 years) have fallen very sharply below the 4% mark, to 3.811% at the time of writing these lines.

At midday on the foreign exchange market, the Euro was trading against $1.0270 about.


The single currency returned to levels not seen since August, and for the first time since September 21, and managed to amplify its excursion beyond the level of perfect parity. The crossing of two remarkable moving averages (20 days out of 50 days) is validated. The next test is a resistance level around $1.0350. Beyond that, a broader revival of the Euro could be envisaged.


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 1.0260 USD. The price target of our bullish scenario is at 1.0584 USD. To preserve the invested capital, we advise you to position a protective stop at 1.0099 USD.

The expected return of this Forex strategy is 324 pips and the risk of loss is 161 pips.


©2022 News Bulletin 247

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