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#1 20-06-2022 14:00:26

johnedward
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From: Paris - France
Registered: 21-12-2009
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EUR/USD: the technical matrix remains somber

EUR/USD: the technical matrix remains somber


The EUR/USD spot, in a bearish configuration, is currently tracing a chartist figure that can be likened to a bearish pattern, against a backdrop of drying up of risk appetite with the recent decisions and statements of the world's major financial institutions, which are determined to tighten the tap firmly to combat galloping inflation, even if it means weakening growth. Even crude oil, which was, admittedly under exceptional geopolitical conditions, an exception as a barometer of risk appetite, is starting to fall back.

"The markets should expect a strong speech on the acceleration of monetary policy tightening in the coming months. This could confirm a further 75bp hike in July and a further 50-75bp hike in September," says Vincent Boy, Market Analyst at IG France.

The rest of the week will nevertheless be busy on the statistical front with, among other things, new home sales in the US today, the European consumer confidence index on Wednesday, the PMI activity indicators (flash data for the current month) on Thursday, the German IFO and the revised U-Mich data on US consumer confidence on Friday.

Right now, the pair is trading at $1.0518.

KEY CHART ELEMENTS
The failure to touch the 50-day moving average (in orange) is now in place, and bearish targets towards $1.0350 and $1.0250 are locked in. A close on the weekly lows in week 23 reinforced the bearish message.

MEDIUM TERM FORECAST
Based on the key chart factors we have mentioned, our medium-term view on the EUR/USD is negative.

Our entry point is $1.0533. The price target of our bearish scenario is $1.0251. In order to preserve the capital invested, we advise you to place a protective stop at $1.0636.

The expected return on this forex strategy is 282 pips and the risk of loss is 103 pips.

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