(News Bulletin 247) – The US inflation figures published yesterday were finally “collected” without difficulty” by the market, which resulted in a continued ebb of Treasuries 10 years below 1.72. The latter, LT government bond yields, are gradually rising around 1.75 on Thursday, as the producer price index will be released at 2:30 p.m.
Excluding food and energy (elements considered volatile), prices rose in December by 0.6%, against a target of +0.5%. It must be said that the rate of monthly rise in prices confirms its tendency to slow down. Remember that in May and July, on the same basket of products, the monthly increase was 0.8%. Asked by the Senate on Tuesday about the institution’s strategy to fight inflation in the United States, J Powell “promised to do everything possible” during his second term to fight against rising consumer prices. . The latter reaching, over one year, excluding food and energy, 5.5%…
Vincent Manuel, Chief Investment Officer at Indosuez Wealth Management, notes that “the latest data on the labor market and inflation prompted the Fed to accelerate the reduction of its asset purchases, which should end between February and mid- March 2022. In addition, the trajectory of FOMC interest rate projections (“dot plots”) shows a Fed that is less divided than in the past, and which now anticipates three rate hikes for 2022 – a development in line with expectations of the Fed. Marlet”.
As a reminder, published on Friday, the December NFP (Non Farm Payrolls) report confirmed the tensions on the job market.
In the immediate future, traders took note this morning of a good surprise on Italian industrial production, up a surprise of 1.9% in November, on a monthly basis.
To follow the producer price index and weekly registrations for unemployment benefits across the Atlantic at 2:30 p.m.
At midday on the foreign exchange market, the Euro was trading against 1,1460$ about.
KEY GRAPHIC ELEMENTS
We warned in our previous analyzes on the flagship currency pair against the “risk” of a false exit from above, an elongated wedge pattern. We are there, and the expression of this false exit abruptly brought the spot back against a 100-day moving average (in orange) with a sharp bearish bias. Traders will be able to gradually resume short positions on the EURUSD spot by taking advantage of a much better quality entry point.
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).
Our entry point is at 1.1461 USD. The price target of our bearish scenario is at 1.1217 USD. To preserve the invested capital, we advise you to position a protective stop at 1.1531 USD.
The expected return of this Forex strategy is 244 pips and the risk of loss is 70 pips.
CHART IN DAILY DATA
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Source: Tradingsat
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