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#1 16-05-2023 11:45:59

Admin & Trader
From: Paris - France
Registered: 21-12-2009
Posts: 3597

EUR/USD: What's new with the pair?

EUR/USD: What's new with the pair?

As the United States hurtles towards a debt wall, formally risking a June 1 default, the dollar lost a few pips against the euro in a market that is showing nervousness across all risk asset classes.

"This Tuesday, Biden is expected to meet with members of Congress to discuss the US debt ceiling, following the postponement of the meeting, which was to be held at the end of last week. Janet Yellen still sees June 1 as the date by which the US will no longer be able to finance government operations if the debt ceiling is not raised," says Vince Boy, market analyst at IG France.

"The negotiations on the US debt ceiling suggest that a source of uncertainty for the markets is disappearing, but caution is warranted given the divisions between the White House and the Republicans," says Cesar Ruiz, Head of Investments and CIO at Pictet Wealth Management. "This is an urgent matter: the US Treasury Department said on Friday that it had only $88 billion available to pay the government's bills as of 10 May - a figure that compares to the $109 billion available a week earlier."

The dollar suffered on Monday from the collapse of the Empire state index for May, which measures manufacturing activity in the New York area, ( -31.9) against an expected indicator of -5 by economists surveyed by the Wall Street Journal. The German ZEW, a barometer of investor sentiment, was a major disappointment, plunging from 4 to -10.6.

Right now, the EUR/USD is trading at $1.0892.

The exit of the ascending channel, identified and fully validated, is accompanied by a triple top structure (14/04, 26/04, 04/05)*, which supports our bearish scenario on the leading currency pair. We are now monitoring the relative dynamics of the moving averages, keeping in mind that the price/ROI divergence has already sent a pessimistic message.

* We will appreciate the high shadows of the corresponding candles on each of these dates.

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

Our entry point is $1.0891. Our bearish scenario price target is $1.0551. In order to preserve the capital invested, we advise you to set a protective stop at $1.0991.

The expected return on this strategy is 340 pips and the risk of loss is 100 pips.

"Anything worth having is worth going for - all the way." - J.R. Ewing



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