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#1 29-04-2021 14:50:51

johnedward
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From: Paris - France
Registered: 21-12-2009
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EUR/USD: the channel exit is fully confirmed

EUR/USD: the channel exit is fully confirmed


Exit of the bearish channel fully validated by a bullish extension, and a crossing of the 100-day moving average (in orange) on the EUR/USD spot

The powerful monetary institution headed by J. Powell has, as widely expected, left its policy unchanged, maintaining the cost of money close to zero, without touching the pace of asset purchases, while insisting on the fact that it was too early to talk about an exit from the crisis, pointing in particular to the employment curves. No rate hike in sight, therefore, before a return to a much healthier situation on the employment front, and a sustainable settlement of inflation above the 2% target.

"Jerome Powell has once again played the "transitory inflation" card to make it clear that the question of a rate hike is not for tomorrow," notes John Plassard, investment specialist at Mirabaud. "If we are to believe the consensus estimates from Wednesday night's press conference, there would be a high probability (90%) that there will be a rate hike in ... December 2022."

Investors will also have followed the presentation by the President of the United States of the second part of his stimulus plan, with the evocative name of "American Families Plan" with a thousand billion dollars...

The issues of financing the infrastructure plans (BBB) and this new plan, in part through a bold tax reform of the corporate income tax and the income tax, will be at the heart of the debate.

In terms of statistics, there was relative disappointment with the US trade deficit for March, at 90.6 billion dollars. As a reminder on Tuesday, the main benchmark yesterday was the Conference Board's index of US consumer confidence, up nearly 13 points to 121.7, above expectations.

Right now, the EUR/USD pair is trading at $1.2116.

KEY CHART ELEMENTS

The crossing of the upper limit of a former bearish channel is now fully validated, by the increase in volatility in particular on last Friday, and by the consecutive crossing, in the wake, without any form of hesitation, of the 100-day moving average (in orange). However, a neutral opinion is proposed in the absence of a quality chart entry point. Especially as we are currently near a thin resistance level at $1.2100.

MEDIUM-TERM FORECAST

Given the key chart factors we have mentioned, our medium-term view on the Euro Dollar (EURUSD) is neutral.

We will maintain this neutral view as long as the EUR/USD is positioned between support at $1.1964 and resistance at $1.2210.

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