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Forex traders working the Euro/Dollar currency pair have a fairly clear program for the next two days: the publication of consumer prices in the United States, in monthly data this Wednesday at 2:30 p.m., and the outcome tomorrow of the last Council of Governors of the year for the ECB.
In the broadest base of products, prices are expected to increase by 2.7% on an annual basis compared to 2.6% in October. Any significant deviation from this consensus may impact the probability of a 25-point drop in the basis of Fed Funds remuneration on December 18. These probabilities are around 86% at the time of writing.
The problem is different for the ECB which must have in mind the revival of a sluggish economy, particularly in Germany, while benefiting from relatively comfortable room for maneuver to gradually lower its key rates. “Growth is obviously becoming a more crucial subject in the short term in Europe than inflation even if, officially, the ECB only deals with the latter,” adds Emmanuel Auboyneau, Managing Partner at Amplegest.
“Updating macroeconomic projections will play a key role,” warns Martin Wolburg, senior economist at GENERALI ASSET MANAGEMENT. “In particular, the growth forecast for 2025, currently at 1.3%, is likely to be revised downwards. Headline and core inflation are expected to converge towards the target for most of the horizon forecast, which will be extended until 2027. Looming US tariffs and the economic fallout from political tensions in France and Germany will help balance risks to inflation.”
See you at 2:30 p.m. for American consumer prices.
At midday on the foreign exchange market, the Euro was trading against $1.0495 approximately.
This article, with open access, is produced by the stock market analysis and strategy research team at News Bulletin 247. To ensure you don’t miss any opportunities, consult all the analyzes and discover our portfolios by accessing our Privileges area.
Forex traders working the Euro/Dollar currency pair have a fairly clear program for the next two days: the publication of consumer prices in the United States, in monthly data this Wednesday at 2:30 p.m., and the outcome tomorrow of the last Council of Governors of the year for the ECB.
In the broadest base of products, prices are expected to increase by 2.7% on an annual basis compared to 2.6% in October. Any significant deviation from this consensus may impact the probability of a 25-point drop in the basis of Fed Funds remuneration on December 18. These probabilities are around 86% at the time of writing.
The problem is different for the ECB which must have in mind the revival of a sluggish economy, particularly in Germany, while benefiting from relatively comfortable room for maneuver to gradually lower its key rates. “Growth is obviously becoming a more crucial subject in the short term in Europe than inflation even if, officially, the ECB only deals with the latter,” adds Emmanuel Auboyneau, Managing Partner at Amplegest.
“Updating macroeconomic projections will play a key role,” warns Martin Wolburg, senior economist at GENERALI ASSET MANAGEMENT. “In particular, the growth forecast for 2025, currently at 1.3%, is likely to be revised downwards. Headline and core inflation are expected to converge towards the target for most of the horizon forecast, which will be extended until 2027. Looming US tariffs and the economic fallout from political tensions in France and Germany will help balance risks to inflation.”
See you at 2:30 p.m. for American consumer prices (November data).
At midday on the foreign exchange market, the Euro was trading against $1.0495 approximately.
KEY GRAPHIC ELEMENTS
The wedge formed since November 22 is coming to an end, and the energy contained is now compressed. An exit from the bottom, consistent with the entry from the top in the second part of November in a volatile environment, is anticipated.
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 1.0494 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 1.0591 USD.
The expected profitability of this Forex strategy is 393 pips and the risk of loss is 97 pips.
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DAILY DATA CHART
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