EUR/USD: The statistical calendar becomes denser before the FOMC

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The Euro/Dollar continued to play the balancing act near $1.07 for €1, in a foreign exchange market which will have to deal this week with a new meeting of the Fed’s Monetary Policy Committee. But to “have a more precise timetable for the rate cut” […]”, we will certainly have to wait until the June meeting at which the macroeconomic projections will be updated,” warns Christopher Dembik, investment strategy advisor at Pictet AM. “In the meantime, the prospect of a “The decline in rates continues to recede, pushing up bond yields and the dollar.”

However, all the elements of language will be good for analysis, in particular because of a concentration of statistical publications on employment and the consumer on Tuesday and Wednesday. “Wednesday will be particularly busy with two data on American employment which will be communicated before the Fed’s decision the same evening: ADP and JOLTS,” notes Alexandre Baradez (IG France). ADP designates, by metonymy, the survey produced monthly by the HR firm AUtomatic Data Processing, and JOLTS the report on new job offers (Job Openings and Labor Turnover Survey)

“The PCE inflation figures released last week do not suggest a more accommodating tone from the Federal Reserve this week. Underlying PCE inflation, the Fed’s preferred measure, did not progress in March: it stood at 2.8% in annual data, the same figure as the previous month. Over the last 4 months, this measure of inflation, mainly concentrated in services, has only slowed by 0.1. %, going from 2.9% to 2.8%, which is clearly insufficient for the Fed to loosen its grip.”

Under these conditions, a status quo on federal rates is in any case expected. And for the next deadline, June 12, the CME Group’s FedWatch tool puts the probability of a new monetary status quo at 88.5%…

To be followed across the Atlantic this Tuesday, the cost of labor at 2:30 p.m., the S&P CS real estate price index at 3:00 p.m. and the consumer confidence index at 4:00 p.m.

Forex traders immediately took note of the first estimates of consumer prices in the Euro Zone. Excluding food, energy, alcohol and tobacco, prices increased by 2.7% at an annualized rate, slightly above the target (+2.6%), still confirming a slowdown in inflation.

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. The succession of high points (12/28, 03/08, 03/21, 04/09 and 04/26) is now clearly decreasing.

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 1.0734 USD. The price target for our bearish scenario is at 1.0435 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 299 pips and the risk of loss is 67.000000000002 pips.

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