EUR/USD: First macro meeting for investors

KEY GRAPHIC ELEMENTS

Crucial day for currency traders, with the publication of US inflation today, also known as the CPI. A better-than-expected statistic would disappoint investors because it would potentially push back rate cuts anticipated by the market. In fact, investors expect a 70% probability of a rate cut starting next March. At this stage investors are dismissing the comments of Fed members who do not confirm their scenario. For example, John Williams, president of the New York branch of the Fed and a member of the Federal Open Market Committee responsible for setting interest rates, indicated that a slowdown in qualitative tightening was still far away. He added that he was not aligned with expectations that the US central bank would ease monetary policy as early as March. Technically the European currency has remained neutral for several days now, awaiting American statistics. In the 1.10 zone we will favor sales to aim for a return to 1.07.

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 1.0973 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 1.1158 USD.

The expected profitability of this Forex strategy is 273 pips and the risk of loss is 185 pips.

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