EUR/USD: ECB and rain of statistics on the agenda

KEY GRAPHIC ELEMENTS

Investors will receive a lot of information today. First of all, they will welcome the decision of the European Central Bank (ECB). A status quo is expected regarding short-term monetary policy. However, they will be very attentive to the weak signals sent by the ECB regarding future rate cuts. The market estimates that at least in June Christine Lagarde will initiate her first rate cut. After the ECB, investors will follow the numerous American statistics. Yesterday, the PMIs indicated a US economy in great shape. Today, new indicators such as orders for durable goods, weekly unemployment registrations, building permits but above all the American Gross Domestic Product should make it possible to see more clearly as to the good health of the American economy. Investors have already reduced their expectations of rate cuts. Indeed, the market estimated until very recently that the Fed would lower its rates starting in March. However, statistics suggest that this rate cut should occur later. Operators are now targeting the month of May for a first downward intervention for the key rates of the American central bank. On a technical level, the European currency is still under resistance at the top of a medium-term range. Bearish initiatives are therefore to be favored in order to aim for the lower bound towards 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 1.0896 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 196 pips and the risk of loss is 262 pips.

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