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#1 07-12-2020 09:33:33

johnedward
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From: Paris - France
Registered: 21-12-2009
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EUR/USD: the euro retains its momentum (several supporting arguments)

EUR/USD: the euro retains its momentum, with several arguments to support it


The euro continues to fully validate its exit from the range against the dollar, now in close proximity to $1.2100, in a market that is still generally favourable to "risky" assets. The continuation of Thursday's release of activity indicators - in this case services - on both sides of the Atlantic, completed the encouraging picture that began in the first part of the week with industrial PMIs in China, Europe and the United States. Powell's warnings at the beginning of last week about the euphoria generated by the vaccination news, and the health situation in the United States, far from the notable progress recorded in Europe, militate in favour of a continuation of the rise of the euro.

According to data from the Johns Hopkins University, whose work is an authority on the subject, more than 216,500 new cases were recorded on Friday within 24 hours. A record. Another record, no less sinister: the United States remains the world's most bereaved country with more than 275,500 deaths.

On the high-stakes US budget issue, Treasury Secretary Mnuchin assured that Trump would sign the proposal of the leader of the Republican majority in the Senate, Mitch McConnell, subject to its adoption by Congress. McConnell, who initially advocated a $499 billion stimulus package, began circulating a new text after a group of elected officials on both sides of the aisle presented a draft package worth $910 billion.

In Europe, however, Hungary continues to threaten to veto the draft EU recovery plan. Hungary and Poland do not accept that the payment of the plan of a global envelope of 749 billion euros is linked to the respect of the rule of law.

As of right now, the EUR/USD pair is trading at $1.2087.

KEY CHARTS
The $1,200 we identified as intermediate resistance shattered last Tuesday, on a remarkable candle marking an uninterrupted mobilisation of the buyer's camp. While the 100-day moving average (in orange) provides firm support, and the 20-day moving average (in dark blue) accentuates its slope, buying signals remain distinctly positive on the spot. Our buying position will be maintained.

MEDIUM TERM FORECAST
In view of the key chart factors we have mentioned, our opinion is positive in the medium term on the Euro Dollar (EURUSD) exchange rate.

Our entry point is $1.2170. Our target price for our bullish scenario is $1.2322. In order to preserve the capital employed, we advise you to position a protective stop at $1.2089.

The expected return on this forex strategy is 152 pips and the risk of loss is 81 pips.

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