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#1 22-11-2022 13:20:03

johnedward
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From: Paris - France
Registered: 21-12-2009
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EUR/USD: today (Wednesday) will be the big trading day of the week

EUR/USD: today (Wednesday) will be the big trading day of the week


The euro continues to trace a bearish consolidation (started on 14 November), nervously awaiting clear signals on the intentions of the Fed and the ECB for the coming months. The Fed will publish its Minutes today. A traditional report of the last monetary policy meeting (FOMC), before operators gather with their families for the long Thanksgiving break. The Minutes will naturally discuss the assessment and interpretation of the latest consumer price indices across the Atlantic, which finally show a slowdown in the price increase dynamic.

But "if the inflation figures in the United States were rather positive, the battle towards the 2% target is not yet totally won", says Thomas GIUDICI, Head of Bond Management at AURIS Gestion. "Moreover, the FOMC members are there to remind us of this (hoping they don't have the same foresight as Cassandra), which allows us to "recalibrate" the expectations of investors who are sometimes a little too optimistic."

While the slowdown in US CPI growth a fortnight ago suggested a relative softening of the Fed's monetary policy, signs of further tightening have subsequently multiplied. James Bullard, the president of the St Louis branch of the US Fed, known for his "hawkish" positions, declared that rates would have to rise above 5% to curb inflation. The same observation was made by Christine Lagarde. The President of the European Central Bank insisted on Friday that interest rates should continue to rise in order to calm the rise in prices.

Today, the calendar will be clearly fleshed out with, in addition to the Minutes mentioned, the barometer indicators of PMI activity in first estimates for the current month.

Right now, the pair is trading at $1.0276.

KEY CHART ELEMENTS
The very significant high wick on Tuesday 15/11 heralded the start of a consolidation phase that is taking a corrective turn towards the 20-day moving average (in dark blue). Below it, the return to a perfect parity level.

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 $1.0284. Our bearish scenario price target is $1.0001. In order to preserve the capital invested, we advise you to place a protective stop at $1.0362.

The expected return on this strategy is 283 pips and the risk of loss is 78 pips.

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