EUR/USD: Triggering a bullish alert

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The technical signal we were waiting for has been triggered: the 20-day moving average (in dark blue) has just crossed upwards, at a significant angle, the 50-day moving average (in orange). In an atmosphere very conducive to risk-taking on the financial markets, the Euro, one of the most reliable barometers of this appetite for risk, completed a consolidation in the pennant, while investors were finally reassured by figures of American inflation yet beyond expectations. It should be noted that the magnifying glass had to be taken out when publishing these CPIs and that it was the improvement in the housing component (which is part of the measurement of prices across the Atlantic) which reassured the financial community.

“The most important element of this report focused on the ‘housing’ component, which has received a lot of attention over the past month. On this level, the CPI is reassuring and housing should clearly contribute to disinflation over the coming months “, indicates Bastien Drut, head of Strategy and Economic Studies at CPRAM.

In the immediate future, currency traders will be able to look forward to the publication early this afternoon of three statistics that could constitute leading indicators of inflation: retail sales, producer prices and weekly registrations for unemployment benefits. .

“In view of the American presidential elections on November 5, the FED’s action schedule should be limited to a single intervention before the summer. The July 31 meeting is being held between the Republican convention (mid-July) and the Democratic convention (mid-August). In order to remain neutral in the political debate, the FED should no longer act until November”, specifies Thomas Gicquel, Head of bond management, Indosuez Wealth Management.

At midday on the foreign exchange market, the Euro was trading against $1.0940 approximately.

KEY GRAPHIC ELEMENTS

We build a bullish position, which we hold as long as the 20-day moving average (dark blue) gravitates above the 50-day moving average (orange).

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 1.0941 USD. The price target for our bullish scenario is $1.1143. To preserve the invested capital, we advise you to position a protective stop at 1.0854 USD.

The expected profitability of this Forex strategy is 202 pips and the risk of loss is 87 pips.

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