EUR/USD: Indecision

KEY GRAPHIC ELEMENTS

Investors did not change their opinions after the publication of American inflation statistics. Indeed, if consumer prices, through the CPI index, came out higher than expected, this is not the case for the American producer price index which came out lower than expected. Operators are therefore still anticipating a rate cut from the American central bank starting next March. Expectations not confirmed by the comments of members of the Fed Board who indicate they want more proof that inflation will anchor itself at 2%, the official objective of the American central bank. Furthermore, geopolitical tensions, particularly in the Red Sea where American and English strikes are carried out on the Houthi rebels while the latter attack military and merchant ships in the area, do not allow the dollar to recover against the euro. So currencies are stable while waiting for a new catalyst. On a technical level, currencies are neutral even if the bias remains negative while the euro is moving below the upper limit of weekly resistance.

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 1.0953 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 253 pips and the risk of loss is 205 pips.

DAILY DATA CHART