EUR/USD: The American economy penalizes the euro

KEY GRAPHIC ELEMENTS

The latest macroeconomic information communicated last week in the United States suggests that the American economy remains strong. In fact, the unemployment rate contracted while hourly wages came out higher than expected. These data therefore argue for postponing the rate cuts expected by the market. In addition, the publication of the minutes of the December 12 and 13 meeting, also known as the Fed Minutes, reveals that a strict monetary policy remains necessary, according to members, to curb demand and new geopolitical risks that could “lead to a stagnation in the growth of inflation”. Technically the European currency has been under bearish pressure for several days after a failure at the upper limit of a weekly range. We will therefore seek to position ourselves for sale to aim for a return to 1.07 initially.

MEDIUM TERM FORECAST

Considering the key graphical factors that we have mentioned, our opinion is negative in the medium term on the Euro Dollar (EURUSD).

Our entry point is at 1.0927 USD. The price target for our bearish scenario is at 1.0700 USD. To preserve the invested capital, we advise you to position a protective stop at 1.1150 USD.

The expected profitability of this Forex strategy is 227 pips and the risk of loss is 223 pips.

DAILY DATA CHART