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The Euro/Dollar remained sluggish around the pivot of $1.0550, at the heart of an underlying downward trend against the Dollar, while the week unfolded under the sign of American employment, with a host of statistics for very good moment, and of French politics, while the two motions of censure, tabled by the most extreme camps of the Assembly, will be submitted to the vote of the deputies this afternoon. The rule is clear: a majority of deputies votes for one of the motions and the government falls.
“The tensions on the French bond market are, obviously, still present. Portugal now borrows at 40 basis points less at 10 years than France. But for the moment, there is no panic”, puts Christopher into perspective Dembik, investment strategy advisor at Pictet AM. “Unless there are any last-minute surprises, the motion of censure should be voted on. It is already integrated into the prices of financial assets.”
“The new Prime Minister, who could possibly be the outgoing one, will have the heavy task of presenting a special law in the coming days in order to allow the renewal of the 2024 budget and which must, in particular, include the possibility offered to Social Security of get into debt.”
On the American employment file, operators will learn the results of the survey by the private firm ADP at 2:15 p.m., a prelude to the publication at the end of the week of the monthly NFP report. Also to be followed tomorrow are the traditional weekly registrations for unemployment benefits, expected at a level still close to 200,000. Currency traders took note yesterday of data relating to the job market for the month of October which highlighted light an increase in job offers. According to the US Department of Labor’s JOLTS report, the number of job openings reached 7.74 million in October, compared with 7.37 million in September.
The PMI services activity barometer in the Euro Zone came out for the month of November in final data symbolically below the 50 point mark, at 49.50, not far from the target. To be continued at 4:00 p.m. the American ISM services PMI.
At midday on the foreign exchange market, the Euro was trading at around $1.05.
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. However, at this stage the decline and the formation of a technical rebound cannot be long in coming, we are watching for the signs.
In the immediate term, the flagship currency pair completes a pullback (graphic rejection) of school on $1.0550.
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 1.0501 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 1.0651 USD.
The expected profitability of this Forex strategy is 400 pips and the risk of loss is 150 pips.
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