(News Bulletin 247) – The Euro continued to form a “false” exit from a wedge, in the immediate vicinity of the 100-day moving average (in orange), an area where the interest in positions short makes sense. The full expression of recent inflationary and monetary effects (Minutes, CPI) will therefore have been delayed.
In terms of statistics, operators took note yesterday morning of a good surprise on Italian industrial production, up a surprise of 1.9% in November, on a monthly basis. Across the Atlantic, the producer price index increased by 0.2% in December (against 0.8% in November), and weekly registrations for unemployment benefits peaked at 230,000 new units.
To follow across the Atlantic, retail sales at 2:30 p.m. and the federal report on industry at 3:15 p.m. Industrial production is expected to rise by 0.2% monthly in volume in December, and the production capacity utilization rate, up to 77.1%.
For the time being, traders took notice of a surprise deficit in the trade balance in the Euro Zone in November (-1.5 billion euros), completely outside of expectations (+1.5 billion euros) . Deficit largely linked, EuroStat tells us, to the import of energy products. Over the period January – November 2021, the Euro Zone recorded a surplus of 133.5 billion euros, against +205.6 billion euros over the period January-November 2020.
At midday on the foreign exchange market, the Euro / Dollar was trading at a level close to 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. Forex traders will be able to gradually resume short positions on the spot EURUSD taking advantage of a much higher 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 1.1458 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 241 pips and the risk of loss is 73 pips.
CHART IN DAILY DATA
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Source: Tradingsat
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