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#1 21-09-2020 10:02:57

Admin & Trader
From: Paris - France
Registered: 21-12-2009
Posts: 2910

EUR/USD: a warning bell will go off below $1.1750!

EUR/USD: a warning bell will go off below $1.1750!

The support line at $1.1750 is becoming increasingly fragile as risk appetite in the financial markets contracts. Last week, a large fringe of traders went hungry at the end of the FOMC.

The Fed, which had nonetheless passed the theoretical exam at the beginning of the Jackson Hole symposium, finally had more difficulty convincing, and above all reassuring, during its practical exam, the monetary policy meeting that ended on Thursday. As a reminder, the Monetary Institution headed by Powell has decided on a monetary status quo, promising to keep its key rates at the floor until inflation passes the "moderate" level, and for a "certain time", the 1.9% mark.

"These new forecasts suggest that interest rates will remain at their current level for at least 2 more years, with inflation unlikely to exceed 1.9% by then," says John Plassard (MIRABAUD), who adds: "Overly dovish forecasts coupled with a marked improvement in the Fed's economic outlook seem to confuse traders. It will be a very long way to the November presidential elections...".

Keith Wade, an economist & strategist at Schroders, says: "This statement comes as no surprise, but it may disappoint those who were looking for more explicit indications on how policy would respond to changing economic conditions. Nevertheless, it is in line with previous meetings just before a presidential election where the approach has been to avoid saying or doing anything controversial".

On the statistical front, on Thursday, while the "Philly Fed", the Philadelphia Fed's manufacturing indicator, came out fully within target, down slightly to 14.9 points, weekly unemployment benefit registrations for week 38 fell short of expectations, with 859,000 new registrations, and on the real estate front, housing starts and building permits narrowly missed expectations for last month.

Right now, the pair is trading at $1.1798.


The currency pair is in a new phase of testing a chart support zone at $1.1749 which is becoming significantly weakened. In the event of a break of this threshold, with validation by volumes and weekly closing, a phase of significant ebb would take place. The most active traders will be able to anticipate this. All the more so since the chartist figure drawn above this line since 13 August is not very engaging.


In view of the key graphical factors we have mentioned, our opinion is negative over the medium term on the pair's exchange rate.

Our entry point is $1.1845. Our target price for our bearish scenario is $1.1440. In order to preserve the capital employed, we advise you to position a protective stop at $1.1920.

The expected return on this forex strategy is 404 pips and the risk of loss is 76 pips.

"Anything worth having is worth going for - all the way." - J.R. Ewing



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