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The Euro continued its week in the red against the Dollar, in the wake of activity barometer indicators below expectations. In the very first estimates for the current month, the industrial and services PMIs in the Eurozone, at 45.6 and 51.9 respectively, missed expectations. It is especially the German industrial component, at 42.6, which is of concern.
“While Germany is struggling to return to growth, the French economy is benefiting from the economic fallout from the Olympic Games. The companies surveyed indicated that they had taken advantage of the business opportunities offered by the hosting of the 2024 Olympic Games in Paris. Overall activity in the German private sector, however, suffered from the poor performance of the manufacturing sector, which survey respondents attributed to a weakening in demand,” commented Dr. Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank.
Similar indicators are expected in the United States at 3:45 p.m.
are keeping a close eye on the American presidential campaign, while Joe Biden’s decision not to run again could reshuffle the cards. If D Trump remains the favourite, he will in any case have to adapt his strategy.
“This turnaround could allow the Democrats to regain some momentum. One thing is certain, however, the Republican candidate will be forced to change his tune, as his main angle of attack until now has focused mainly on the age and physical and mental capacity of Joe Biden,” explains Thomas Giudici, head of bond management at Auris Gestion.
At midday on the foreign exchange market, the Euro was trading against $1,0840 approximately.
KEY GRAPHIC ELEMENTS
In a strong volatility in week 27, the Euro / Dollar currency pair regained the upper part of a bearish oblique line, constituting a short-term oxygen supply. The technical signals are contradictory in the immediate future and do not allow a serene position-taking. In any case, we are suspending our sell lines. We are currently witnessing a test of a resistance level located at $1.0885 / $1.0900. It is clear that the currency pair is now stalling.
MEDIUM TERM FORECAST
Considering the key graphic factors that we have mentioned, our opinion is negative in the medium term on the Euro Dollar parity (EURUSD).
Our entry point is at 1.0840 USD. The price target of our bearish scenario is at 1.0701 USD. To preserve the capital invested, we advise you to position a protective stop at 1.0907 USD.
The expected return on this Forex strategy is 139 pips and the risk of loss is 66.999999999999 pips.
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