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The Euro/Dollar currency pair remained in a delicate position at the end of the protest reaction, while the trajectory of inflation returning to the 2% target continues to torment the trading rooms. This return will obviously not be a short and linear path.
The main statistical event, the gross domestic product (GDP) of the United States grew less than expected, by 1.6% in the first quarter, according to a first estimate. Economists surveyed by the Wall Street Journal, for their part, expected an increase of 2.2% on an annual basis. Meanwhile, inflationary tensions persist since the underlying inflation indicator increased against all expectations, by 3.7% over the first three months of the year, after 2% in the fourth quarter. Another leading indicator of price tensions, new weekly unemployment registrations were also lower than expected, at 207,000 the previous week, against a consensus of 215,000.
It is in this context that operators will learn this Friday of the statistical highlight of the week, namely the PCE prices (personal consumption expenditures), the Fed’s favorite barometer in its assessment of inflation. Core data (excluding volatile items) is expected to increase monthly by 0.3%. See you at 2:30 p.m. to read the publication, a deviation from the consensus could have a significant impact on the currency pair.
The American 10-year continued to heat up, now close to 4.70%.
At midday on the foreign exchange market, the Euro was trading against $1.0730 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 1.0726 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 290 pips and the risk of loss is 75 pips.
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