(News Bulletin 247) – The short-term bias continued to align with the medium-term bearish bias on the Euro/Dollar, with the greenback asserting its safe-haven attributes as the Russian military offensives in Ukrainian territory are in full swing . And that the economic sanctions targeting Russia will undoubtedly have an impact on our own economies. In particular Germany, very largely dependent on Russia for its supplies of natural gas. Risk appetite is dried up in this context, especially since Moscow placed its nuclear arsenal “on alert” this weekend. “Following these various announcements over the weekend, investors should look to the US dollar as a reserve exchange value, but also to the price of gold.” notes Vincent Boy for IG France.
The question is to what extent the Fed will opt for a less steep monetary turn. “As a reminder, the US Federal Reserve must end asset purchases in early March, before raising its rates at the FOMC on March 15 and 16. The current situation, and in particular the race for the dollar, could put a stop to this calendar. to enable it to support the monetary system. The probability of a rate hike of 50bp also fell sharply over the weekend, dropping from 25% to just 5% this morning.” raises M Boy.
On the data side, the main macroeconomic figures took a back seat on Friday despite being satisfactory, whether for PCE prices, durable goods orders and household income and spending in the United States. To follow in priority, on the agenda this Monday, the trade balance of goods at 2:30 p.m. and still across the Atlantic, the Chicago PMI index at 3:45 p.m.
The powerful monetary institution meets in March its Monetary Policy Committee (FOMC) and so far, a double increase (ie 50 bps at once) of the Fed Funds was likely.
KEY GRAPHIC ELEMENTS
The transition phase between February 4 and 23, in the form of a slip without federation, under the 100-day moving average (in orange) is over. The underlying bearish bias aligns with the short term, and the chart of a candle today, at least at this point in school black marubozu, illustrates the firm grip of the selling side. We are reviewing our bearish targets, at $1.10, then if necessary at $1.0856.
MEDIUM TERM FORECAST
In view of the key graphic factors that we have mentioned, our opinion is negative in the medium term on the Euro Dollar (EURUSD).
Our entry point is at 1.1210 USD. The price target of our bearish scenario is at 1.1001 USD. To preserve the capital invested, we advise you to position a protective stop at 1.1306 USD.
The expected return of this Forex strategy is 209 pips and the risk of loss is 96 pips.
CHART IN DAILY DATA
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