EUR/USD: Persistent selling signals

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Against a backdrop of continued contraction in risk appetite on European markets, the Euro/Dollar currency pair continued to depreciate, now close to $1.0520 per €. NVidia’s quarterly results, which even weigh on exchange rates, are good, beyond analysts’ expectations, but constitute a relative disappointment for shareholders, who are legitimately greedy on these valuation levels. Hence a very lukewarm reception from Wall Street for the results of the new Shepherd Star markets. The accounts of the world’s largest capitalization are now monitored by all global investors, a bit like a major American statistic.

Forex traders will carefully follow the day’s figures, as the week finally gets denser on the macroeconomic level. On the menu, weekly registrations for unemployment benefits, the Philly Fed and sales of old homes.

Furthermore, currency traders are gradually losing their appetite for risk as Trump reveals his next 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 $1.0520 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 1.0529 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 1.0671 USD.

The expected profitability of this Forex strategy is 428 pips and the risk of loss is 142 pips.

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