(News Bulletin 247) – This article, with open access, is produced by the stock market analysis and strategy research team at News Bulletin 247. To ensure you don’t miss any opportunities, consult all the analyzes and discover our portfolios by accessing our Privileges area.
The Euro/Dollar was approaching a bearish resistance slant (drawn in black), at a level close to the 50-day moving average (in orange), also bearish. Currency traders took note yesterday of the decision of the BoE (Bank of England), a status quo widely anticipated. But they noted the institution’s willingness to relax its monetary policy very soon.
The British central bank kept rates unchanged. However, the institution is clearly heading towards a decline in the coming months. “With the progress made in ensuring that inflation remains around 2% (…) it is likely that we will need to lower rates in the coming quarters and make monetary policy less restrictive, perhaps more than expected by the market,” Bank of England Governor Andrew Bailey said at a press conference, according to comments reported by AFP.
Enough to further mark the path of the ECB, for the start of a rate cut at the end of the Governing Council next month.
In terms of statistics, there was little to eat on Thursday, apart from the weekly registrations for unemployment benefits, which at 231,000 new registrations, exceeded the consensus. Enough to fuel the reasoning of J Williams, President of the NY Fed branch, who in a recent release, declared “that there are signs indicating that households are more cautious in their spending, and he expects to term of the rate cuts, although the decision to lower them will depend on all the available data”, report analysts from Natixis CIB Research, cited by Agence France Presse. “Thus, the Fed could start lowering rates as soon as the summer break ends,” they add.
On the agenda this Friday, to follow as a priority the preliminary data from the consumer confidence index (U-Mich), at 4:00 p.m.
At midday on the foreign exchange market, the Euro was trading against $1.0780 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 currency pair EURUSD, especially since the break of the 50-day moving average (in orange) by its 20-day counterpart (in dark blue) took place 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, under an oblique line of resistance (in black).
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 1.0781 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 1.0886 USD.
The expected profitability of this Forex strategy is 345 pips and the risk of loss is 105 pips.
News Bulletin 247 advice
DAILY DATA CHART
I have over 8 years of experience working in the news industry. I have worked as a reporter, editor, and now managing editor at 247 News Agency. I am responsible for the day-to-day operations of the news website and overseeing all of the content that is published. I also write a column for the website, covering mostly market news.