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If Wall Street will remain closed due to a public holiday this Monday (commemoration of the birth of Martin Luther King), currency traders will nonetheless be deprived of guidance, with the elements of language that the impetuous Donald Trump will use during his inauguration as the 47th President of the United States. The one who was already tenant of the White House (2017 – 2021) will subsequently sign a multitude of presidential decrees, on immigration, customs protections, drilling authorizations in particular, as well as possible pardons. Currency traders will have something to “currency”…
D Trump will have the opportunity to clarify his geopolitical positions, as the truce comes into force in Gaza. Its imperialist positions on Canada, Greenland and Panama will naturally be clarified.
“Geopolitics will also make a comeback this year thanks to a new Trump presidency,” confirms Christopher Dembik, investment strategy advisor at Pictet AM.
“For the moment, its exits, particularly concerning the Panama Canal and Canada, have been considered with disdain by many French commentators. In reality, all this is more subtle. The new American administration wishes to create a strategic glacis in s ensuring the control of the United States over Canada and Greenland In the case of Greenland, the objective is twofold: to control the new trade route which is opening up due to the melting of the ice, and to access metals. essential to ensure American economic development and its hegemony in AI This involves having control of Greenland’s uranium reserves.
Furthermore, the Euro/Dollar currency pair, while maintaining its basic bearish bias, began to balance in the short term, against a backdrop of hopes of seeing the Fed adopt a less rigid posture than the financial community feared in very beginning of the year. The reason: the statements made Thursday by the governor of the American Federal Reserve (Fed), Christopher Waller. The central banker seemed in favor of cuts in key rates from the American institution in March, and indicated that three or four cuts were possible this year, if economic data permits, reports Deutsche Bank. This somewhat reassured a market which feared that the Fed would pause rate cuts this year.
In terms of statistics on Friday, the final consumer price data for December in the Euro Zone were published, without any deviation from the first estimates. Excluding volatile items (food, energy, alcohol and tobacco), prices increased by 2.7% annually, at the same rate as in November. Across the Atlantic, the report on the health of the industry in December exceeded expectations, whether for the production volume (+0.9%) or for the production capacity utilization rate (77.6%). ).
In addition, China has published its growth figures for the whole of 2024 as well as for the fourth quarter of last year. China’s gross domestic product (GDP) increased by 5% in 2024, the government’s target, and by 5.4% in the fourth quarter, and therefore more than the 5% expected by the consensus.
If the agenda is almost deserted this Monday, it will begin to become denser tomorrow with the German “ZEW”, a valuable barometer of confidence in the leading German economy.
At midday on the foreign exchange market, the Euro was trading against $1.0320 approximately.
KEY GRAPHIC ELEMENTS
The 50-day moving average (in orange) continues to constitute a solid technical and graphical barrier. In the shorter term, it is even its 20-day counterpart (in dark blue) which acts as dynamic resistance. And this without the RSI oscillator positioning itself in the oversold zone.
Once perfect parity is reached, namely 1$ for 1€, a vigorous buyer reaction of protest could be put in place.
MEDIUM TERM FORECAST
Considering the key graphical factors that we have mentioned, our opinion is negative in the medium term on the EURUSD parity.
Our entry point is at $1.0318. The price target for our bearish scenario is $1.0001. To preserve the invested capital, we advise you to position a protective stop at $1.0406.
The expected profitability of this Forex strategy is 317 pips and the risk of loss is 88 pips.
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