EUR/USD: US GDP surprises on the rise

KEY GRAPHIC ELEMENTS

Forex traders are bombarded by macroeconomic statistics. Indeed, yesterday investors first had to welcome the decision of the European Central Bank (ECB) concerning its monetary policy. The European Central Bank therefore declared that it was maintaining its rates at the record level of 4%. During the press conference which followed the decision, Christine Lagarde declared that price pressures would “continue to ease over the course of the year”. Investors see the first rate cut now for the start of the summer, next June. This information did not favor the euro. Furthermore, the American figures strengthened the dollar. The American Gross Domestic Product (GDP) came out higher than expected. The U.S. economy grew at an annualized rate of 3.3% in the final quarter of last year. A figure significantly higher than market expectations. Moreover, according to the price indices, according to the latest indicators, the latter are progressing less than expected, economists are betting on a “soft landing”. Be careful, however, with weak signals. For example, Visa CEO Ryan McInerney said recent data showed an increase in late credit card payments in the United States. Expectations of rate cuts are shifting over time. Investors now see the American central bank lowering its rates not in March but in May. This afternoon, operators are waiting for the PCE index at 2:30 p.m., an inflation index closely followed by the Fed. On a technical level, the bearish proposals of recent weeks have been correct since the euro is slowly sliding towards 1.07. We will therefore maintain a seller bias up to this level. Any rebound towards the upper limit of the broad medium-term range, around around 1.10, will constitute an opportunity to return to selling on the European currency.

MEDIUM TERM FORECAST

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

Our entry point is at 1.0828 USD. The price target for our bullish 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 128 pips and the risk of loss is 330 pips.

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