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The French political situation will ultimately not have caused the Euro/Dollar currency pair to bend, which continues to consolidate within a basic bearish bias. And the DAX and the CAC showed, as the weekend approached, very positive provisional weekly results. “The Paris stock market may not be so affected by the political instability and economic difficulties encountered by France. This is also the case for the DAX40 in Germany, while the political and economic situation is not not much more flourishing across the Rhine”, analyzed yesterday morning Grégoire KOUNOWSKI, Investment Advisor at Norman K.
No feeling of fear in the trading rooms, therefore, while the year 2024 will see a fourth tenant move into the Matignon Office. “In reality, a majority of investors could bet on the fact that this instability on both sides of the border will force the European Central Bank to continue its rate cut in order to preserve the euro. The leverage would therefore be more monetary than political .”
“If we must remain attentive to the borrowing rate spreads between France and its neighbors, the current political situation would not be, a priorinot likely to create the conditions for a financial crisis in France.”
On the statistical side, the main event of the day for currency traders is the publication of the NFP (Non Farm Payrolls) report, a traditional monthly survey on the health of private employment across the Atlantic. This health is excellent, all the employment meetings published earlier in the week confirmed it: weekly registrations for unemployment benefits, new JOLTS job offers, ADP survey, Challenger job cuts. Here are the main consensuses regarding the report which will be published at 2:30 p.m. (Paris time): the unemployment rate is expected to remain stable at 4.1% of the active population. The average increase in hourly wages is expected to slow down relatively, to +0.3% and the number of job creations to 218,000.
Note that GDP growth in the Euro Zone was confirmed by EuroStat at 0.4% in the third quarter.
At midday on the foreign exchange market, the Euro was trading against $1.0590 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. 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 1.0580 USD. The price target for our bearish scenario is at 1.0101 USD. To preserve the capital invested, we advise you to position a protective stop at 1.0686 USD.
The expected profitability of this Forex strategy is 479 pips and the risk of loss is 106 pips.
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