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#1 22-06-2022 09:30:25

johnedward
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From: Paris - France
Registered: 21-12-2009
Posts: 3292
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EUR/USD: near a dynamic resistance

EUR/USD: near a dynamic resistance


The Euro, one of the benchmark barometers of risk appetite in the financial markets, followed the major equity indices in Europe (CAC and DAX) in the first part of the week. Note that the main equity indices across the Atlantic were expected to rise yesterday, after a bank holiday on Monday (JuneTeenth). A welcome breath of fresh air after a very tough week, with the resolutely austere and offensive tone of the world's major money managers. The latter are determined to tighten the tap firmly to combat galloping inflation, even if it means weakening growth.

"The markets should expect a strong speech on the acceleration of monetary policy tightening in the coming months. This could confirm a further 75 basis point hike in July and a further 50-75 basis point hike in September," says Vincent Boy, Market Analyst at IG France. "The Fed and other central banks want to believe that they can engineer a 'soft landing' - but this is proving increasingly complicated," says CÚsar Perez Ruiz, Head of Investments and CIO at Pictet Wealth Management.

There were no major statistical figures on the agenda on Monday or Tuesday. The rest of the week will nevertheless be busy on the statistical front with, among other things, 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 $1.0509.

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. Further contact with the aforementioned trendline would further strengthen the quality of the entry point.

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

We will maintain this neutral view as long as the EUR/USD is positioned between support at $1.0350 and resistance at $1.0758.

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