EUR/USD: Clear graphical reading

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In a market finally focused this Thursday on the results of companies on this side of the Atlantic (Ayden, Unilever, Astrazeneca, Crédit Agricole), the Euro remained stable against the Dollar, at the top of the short wedge, in delicate position in the short term.

To follow on the macroeconomic front are weekly registrations for unemployment benefits in the United States at 2:30 p.m. They are expected at 221,000, a level still close to 200,000, reflecting tensions on the job market. Tensions highlighted once again during the publication of the latest federal NFP employment report last Friday. As a detailed reminder, the unemployment rate, expected to rise to 3.8%, ultimately remained stable at 3.7% of the active population. Problematic for inflation, the average hourly wage accelerated upward again (+0.6% against a target of +0.3%), and above all, job creations jumped to more than 350,000 over the month. of January!

For strategists at Pictet Wealth Management, “it is too early to conclude that the labor market is warming up again, given other data showing a general cooling trend. But the report raises the risk of a re-acceleration of the economy, which, [alimenteraient] certainly bets on later rate cuts, and would reduce their cumulative magnitude over 2024. Powell has clearly opposed a rate cut starting in March, and the report [Non Farm Payrolls] close the door even more.”

Yesterday, several Fed executives put forward a militant argument for a calm attitude, without urgency for the start of monetary easing. Once this easing has begun, there is no reason to adopt a significant pace of loosening the tap.

At midday on the foreign exchange market, the Euro was trading against $1.0770 approximately.

KEY GRAPHIC ELEMENTS

Interestingly technical fact, the 20-day moving average (in dark blue, bearish), is currently breaking its 50-day moving average (in orange, horizontal), a first contact since November 13. The graphic and technical situation is tensing under this trend line. However, the angle of attack is not very important. This trend curve, the first mentioned, which accelerates downward, will conveniently serve as a trailing stop).

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 1.0773 USD. The price target for our bearish scenario is at 1.0436 USD. To preserve the invested capital, we advise you to position a protective stop at 1.0856 USD.

The expected profitability of this Forex strategy is 337 pips and the risk of loss is 83 pips.

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