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The Euro/Dollar currency pair, one of the most reliable barometers of risk appetite, was suffering near $1.0550 per €, while geopolitical risk has returned to the fore since the signing of a Russian presidential decree authorizing the expansion of the conditions for the use of atomic weapons.
Quoted by AFP, Dmitri Peskov, Kremlin spokesperson, considered that this decision was “necessary” in the face of “threats” from the West. Russia’s move comes two days after the Biden administration gave Ukraine a boost, allowing it to strike Russian soil with US long-range missiles. And after, according to the Russian military, Ukraine launched six tactical missiles into Russian territory. Five were destroyed and the last was damaged by Russian anti-aircraft defense. AFP confirmed the strike with a Ukrainian official on condition of anonymity.
In the macroeconomic chapter, relegated to the background on Tuesday, for the Euro Zone, the final consumer price data, in final data for the month of October, excluding food, energy, alcohol and tobacco, came out at +2.7 % on an annual basis, consistent with initial estimates. RAS on housing starts and housing building permits in October in the United States, very close to expectations. On the macroeconomic agenda this Wednesday, priority will be given to a speech by C. Lagarde, President of the ECB, during a conference in Frankfurt at 2:00 p.m. and crude oil stocks across the Atlantic at 4:00 p.m.
Forex traders are gradually losing their appetite for risk as Trump reveals his upcoming appointments. Thomas Giudici, head of bond management at Auris Gestion, notes “thus the future appointments of (i) Matt Gaetz to justice, subject to an ethics report from the House of Representatives for various alleged sexual offenses and embezzlement, (ii) Robert Kennedy Jr, anti-vax conspirator, as health secretary, dragging the entire pharmaceutical sector into the red, (iii) Brendan Carr at the head of the telecoms regulator and quite fiercely opposed to GAFAM which he considers to be a censorship cartel to be dismantled or, for example, to (iv) Chris Wright as Secretary of Energy and founder of a company specializing in hydraulic fracturing and shale oil. ”
Let’s add to this list Linda McMahon, former boss of American wrestling, who was offered the post of Minister of Education… The billionaire was in charge of SMEs during Trump’s first term.
At midday on the foreign exchange market, the Euro was trading against $1.0550 approximately.
KEY GRAPHIC ELEMENTS
The currency pair has just come out from the bottom, in intense volatilityof a wedge pattern, which confirms the bearish bias, which is now fundamental. Since then, the fragile supports have broken one after the other. Negative review maintained.
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 1.0549 USD. The price target for our bearish scenario is at 1.0101 USD. To preserve the invested capital, we advise you to position a protective stop at 1.0681 USD.
The expected profitability of this Forex strategy is 448 pips and the risk of loss is 132 pips.
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