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#1 20-08-2020 09:22:49

johnedward
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From: Paris - France
Registered: 21-12-2009
Posts: 2910
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EUR/USD: no solid support for the dollar in view

EUR/USD: no solid support for the dollar in view


Penalised by the indefinite postponement of a new round of Sino-American trade negotiations, and due to a lack of agreement between Democrats and Republicans in Congress on a new part of the fiscal stimulus plan, the USD is gradually losing its splendour, in favour of the euro and above all gold, which is more than ever imposing itself as a benchmark safe haven.

The momentum is not hindered today, thanks in particular to Eurozone inflation figures that are perfectly in line with expectations. In final data for last month, the consumer price index, excluding food, energy, alcohol and tobacco (volatile elements) rose by 1.1% on an annualised basis, perfectly in line with the target, according to the latest Eurostat data. The next publication is scheduled for the first day of next month: first estimates for this current month.

It is thus against the backdrop of an equation with many unknowns that the major financial experts will be addressing the traditional Jackson Hole symposium in one week.

As of now, the pair is trading att midday on the foreign exchange market, the Euro was trading at around $1.1842.

KEY CHARTS

The EUR/USD pair has now exited the top of a rectangle consolidation pattern, confirming the strong bullish momentum at the beginning of the pattern. The option to trend above the 20-day moving average (in dark blue) is encouraged.

MEDIUM-TERM FORECAST

In view of the above, our opinion is bullish in the medium term on the pair's exchange rate.

Our entry point is $1.1940. The target price for our bullish scenario is $1.2150. To preserve the capital employed, we advise you to position a protective stop at $1.1900.

The expected return on this forex strategy is 205 pips and the risk of loss is 50 pips.

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