(News Bulletin 247) – The final consumer price data in the Euro Zone, published at the end of the morning are not likely to disrupt the bearish bias of the Euro against a Dollar whose potential for remuneration is considered much more favorable. EuroStat confirms, on an annualized basis, a price increase of 4.1%. The increase is even revised downwards for prices corrected for volatile elements (food, energy, alcohol and tobacco), to 2.0%, against 2.1% initially calculated. Result: no (over) pressure exerted on the European Central Bank at this stage. The sell-off energy release of November 10, as consumer prices showed overheating continues. In addition to these American CPIs, the markets will be able to compose next week with PCE prices (Personal Consumption Expenditures), the Fed’s favorite barometer for taking price temperature.
In terms of statistics, retail sales in the United States for the month of October were published by the Census Bureau. Excluding automobiles, these sales jumped at a monthly rate of 1.7%, largely beating the consensus (+ 1.0%) and making us forget a dull month of September. An indicator with a strong stock market impact in an economy where traditionally, the bulk of national wealth creation comes from domestic consumption. To be continued for the rest of the day, housing starts and building permits at 2:30 p.m. as well as crude stocks at 4:30 p.m.
At midday on the forex market, the Euro was trading against $ 1.1320.
KEY GRAPHIC ELEMENTS
We clarified the following on Wednesday, as a reminder: “A break in a fragile support zone at 1.1530 would increase volatility. The working band between $ 1.1530 and $ 1.1675 would then be obsolete.” This zone gave way, with validation by volatility. The current seller is thereby strengthened. Next bearish target locked at $ 1.1150. And this without excluding the possibility of a pullback on the $ 1.1530.
As a result, a sharp punctual reaction of protest will have to be considered.
MEDIUM-TERM FORECAST
In view of the key graphical factors that we have mentioned, our opinion is negative in the medium term on the pair Euro Dollar (EURUSD).
Our entry point is at 1.1316 USD. The price target for our bearish scenario is at 1.1151 USD. To preserve the committed capital, we advise you to position a protective stop at 1.1361 USD.
The expected return on this Forex strategy is 165 pips and the risk of loss is 45 pips.
DAILY DATA CHART
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Source: Tradingsat
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