(News Bulletin 247) – The Euro continued its flat consolidation against the Dollar, the spot being subject to headwinds after statistical indicators capable of fueling risk appetite, and therefore the single currency (Conference Board of consumer confidence, final US Q3 GDP, reassuring PCE, Fed manufacturing index Richmond), and able to reinforce the Fed’s tougher stance, and therefore support the greenback, through the mechanics of the “remuneration” differential between currencies…
These are indeed all signs of the resilience of the American economy which will comfort the Fed in pursuing its strict rate policy. The yield on the 10-year government bond (Treasuries 10 yrs) further heated up to flirt with 3.90%, which moreover particularly weighed on the emblematic files of the Nasdaq.
Forex traders are watching the explosion in the number of Covid19 cases in mainland China amid growing fears of a return to drastic global factory shutdowns. It is this severe strain on supply chains in an economy that is still largely globalized, which may constitute a major brake on risk appetite at the turn of the year.
To follow at 2:30 p.m. (Paris time) the weekly registrations for unemployment benefits in the United States.
At midday on the foreign exchange market, the Euro was trading against $1.0650 around.
KEY GRAPHIC ELEMENTS
The 20-day moving average (in dark blue) continues to play its role of chart support. Positive opinion kept above this trendline whose orientation is straight. We will monitor the attitude of prices when making contact, if necessary, with this trendline.
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 1.0650 USD. The price target of our bullish scenario is at 1.1189 USD. To preserve the capital invested, we advise you to position a protective stop at 1.0519 USD.
The expected return of this Forex strategy is 539 pips and the risk of loss is 131 pips.
CHART IN DAILY DATA
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