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#1 17-11-2022 16:11:40

johnedward
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From: Paris - France
Registered: 21-12-2009
Posts: 3368
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EUR/USD: is a reversal next?

EUR/USD: is a reversal next?


Like other risk asset classes, the EUR/USD was backtracking in the midst of a nervous week, marked by the rise in geopolitical tensions between Moscow and NATO and by growing questions about the Fed's real intentions for the coming months. While the mood had eased since the publication of the latest consumer and producer prices, which were lower than expected, yesterday's publication of retail sales was a reminder that the economic machine is working at full speed, even though tensions on the job market persist. The easing of US monetary policy is probably not for the foreseeable future. The market has been cooled by the restrictive comments of several members of the US Federal Reserve (Fed), namely Kansas City Fed President Esther George and San Francisco Fed President Mary Daly. In an interview with the Wall Street Journal, the former warned of the danger of stopping rate hikes prematurely. Mary Daly considered that a landing of the central bank's key rates between 4.75% and 5.25% seemed "reasonable".

Right now, the EUR/USD is trading at $1.0324.

KEY CHART ELEMENTS
After a very significant initial high on Tuesday, and then an inability to break above the highs the next day, a new alert is being triggered on Thursday. If the candle were to maintain this pattern, i.e. a black body with no shadow, or even widen at the bottom, the option of a correction towards the 20-day moving average (in dark blue) would take shape.

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

Our entry point is $1.0330. The price target of our bearish scenario is $1.0101. In order to preserve the capital invested, we advise you to place a protective stop at $1.0408.

The expected return on this forex strategy is 229 pips and the risk of loss is 78 pips.

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