(News Bulletin 247) – Like other risky asset classes, the Euro against the Dollar was backtracking in the midst of a nervous week, marked by the rise in geopolitical tensions between Moscow and NATO and by growing questions about the Fed’s real intentions for the coming months. While the mood had relaxed since the publication of the latest consumer prices and producer prices, which were lower than expected, yesterday’s publication of retail sales served as a reminder that the American economic machine is working at full speed, even though that tensions in the labor market persist. The easing of US monetary policy is probably not for now. The market is cooled by the remarks considered restrictive by several members of the American Federal Reserve (Fed), namely the president of the Fed of Kansas City, Esther George, and that of San Francisco, Mary Daly. The first notably warned, in an interview with the Wall Street Journal, of the danger of prematurely stopping increases in key rates. Mary Daly, she, estimated that a landing of the key rates of the central bank between 4.75% and 5.25% seemed “reasonable”.
To follow a dense statistical program this Thursday with at 2:30 p.m., weekly registrations for unemployment benefits, the Philly Fed manufacturing index and housing starts and building permits.
At midday on the foreign exchange market, the Euro was trading against $1.0330 about.
KEY GRAPHIC ELEMENTS
After a first very significant high wick on Tuesday, then an inability to exceed the high points the next day, a new alert is being ignited on Thursday. If the candle were to keep this look, namely a black body without a shadow, or even expand from below, the option of a correction towards the 20-day moving average (in dark blue) would take shape.
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 1.0330 USD. The price target of our bearish scenario is at 1.0101 USD. To preserve the invested capital, we advise you to position a protective stop at 1.0408 USD.
The expected return of this Forex strategy is 229 pips and the risk of loss is 78 pips.
CHART IN DAILY DATA
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