EUR/USD: Supporting short moving average

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The forex traders’ week will revolve around the outcome, Wednesday, of a new FOMC (Fed Monetary Policy Committee). Not that the issue is a start to loosen the monetary tap – a status quo on rates is acquired -, but to refine the probabilities of a first rate cut in June. In the meantime, at the beginning of May, the next FOMC will most likely result in a monetary status quo. Because it must be said that several macroeconomic statistics (consumer prices, producer prices) showed, last week, once again that the return to a theoretical objective of 2% is not an easy task. In short, the fight is still long, and it is the elements of language that will be used to say it that will be dissected. Furthermore, the powerful monetary institution will unveil its new economic forecasts.

“Market expectations for the reduction in key rates in 2024 are further reduced, to 3 reductions for the Fed”, for Jeanne Asseraf-Bitton, Head of Research and Strategy at BFT IM.

In terms of statistics on Friday, the University of Michigan consumer confidence index unexpectedly contracted to 74.5 points in March in preliminary data, where a slight increase to 77.1 points was expected. by the consensus after 76.9 points in February. American industrial production for the month of February increased slightly by 0.1%, which is in line with expectations.

RAS concerning the final CPI data in the Euro Zone, for the month of February. Excluding food, energy, alcohol, and tobacco, prices increased at an annual rate of 3.1%, which is in line with the previous estimate.

At midday on the foreign exchange market, the Euro was trading against $1.0900 approximately.

KEY GRAPHIC ELEMENTS

Consistent with our previous papers, we build a bullish position, which we maintain as long as the 20-day moving average (in dark blue) gravitates above the 50-day moving average (in 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 1.0900 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 1.0809 USD.

The expected profitability of this Forex strategy is 243 pips and the risk of loss is 91 pips.

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