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Against a backdrop of increased caution regarding risky assets, the Euro/Dollar currency pair continued its downward movement this week, below a graphical resistance zone located at $1.0. And it is not the PCE (personal consumption expenditures) prices, published a few minutes ago, that will clarify the balance of power. Not that the indicator is not important – it is even the reference measure for the Fed in its assessment of inflation – but no deviation from the target is to be noted.
These PCE prices are therefore showing a slight deceleration of +0.2%, excluding food and energy. Furthermore, while Americans’ monthly spending is not surprising (and therefore does not deviate from the consensus), their income (+0.2%) is below target (+0.4%). To be followed at 4:00 p.m. are the revised data from the consumer confidence index (U-Mich), which came out in initial estimates at 66.0.
For Thursday, if there was only one figure to remember, it would be the US quarterly GDP in very early estimates, at +2.8% annualized. Which represents a very significant upward deviation from the consensus. No problem regarding weekly unemployment benefit registrations, right on target.
At midday on the foreign exchange market, the Euro was trading against $1,0860 approximately.
KEY GRAPHIC ELEMENTS
After failing against a graphical resistance level around $1.0910, the EURUSD spot has retreated, now finding itself on a congestion zone of two notable moving averages, at 20 and 50 days.
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 1.0863 USD. The price target of our bearish scenario is at 1.0665 USD. To preserve the capital invested, we advise you to position a protective stop at 1.0941 USD.
The expected return on this Forex strategy is 198 pips and the risk of loss is 78 pips.
The News Bulletin 247 council
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