EUR/USD: The macroeconomic calendar is getting denser

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The Dollar continued to maintain a small advantage against the Euro in the context of the rise in 10-year federal rates.

“In January, financial markets anticipated a cut in the key rate of 170 basis points by the end of the year, or almost seven rate cuts. Today, fewer than two cuts are planned. Bond rates 10-year bonds reached their level of last November by climbing 85 basis points to 4.6%, and the stock markets have lost almost 4% since the announcement of the latest inflation figures”, summarizes Hervé Thiard, Managing Director of Pictet Asset Management.

The estimate of the trajectory of federal rates has been turned upside down in the space of a few months. And the PCE prices, the Fed’s preferred barometer in its assessment of price dynamics, which will be published on Friday, will make it possible to further adjust this estimate.

“These market movements were exacerbated by the Fed chairman who indicated that the “lack of further progress” on inflation meant that rate cuts would be delayed, marking his second change of course in four months , after that of December which signaled the start of a cycle of monetary easing. The revision of market expectations and the pivot on the pivot of the Fed now seem more aligned with American economic reality.

Consumer confidence remains high, and we will be able to get a concrete glimpse of this tomorrow with the very first estimates of US GDP for the first quarter.

To follow this Wednesday at 2:30 p.m. orders for durable goods in the United States.

At midday on the foreign exchange market, the Euro was trading against $1.0680 approximately.

KEY GRAPHIC ELEMENTS

THE pullback very clear Thursday 04/18 on a resistance zone ($1.0693) will invite people to take short positions again on the EURUSD currency pair, especially as the break of the 50-day moving average (in orange) by its counterpart at 20 days (in dark blue) was made at a relatively large angle.

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 1.0683 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 1.0801 USD.

The expected profitability of this Forex strategy is 247 pips and the risk of loss is 118 pips.

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