EUR/USD: All eyes are on tomorrow's PCE index

While last week will have been guided by the decisions and comments of the major central banks, the latter, which are continuing in Sintra, at the ECB's annual Forum, can be put into perspective with a battery of statistical indicators this week. Rich and dense battery especially in the US. And it is clear that the consensus is exceeded for many of them, in particular for the sacrosanct index of consumer confidence (Conference Board), which is resisting. What comfort, naturally, J Powell in the pursuit of its restrictive monetary policy.

As a reminder, As a reminder, the consensus overruns, Tuesday, on the American statistics - the agenda was full of them! - have been spectacularly soared, in particular for the Richmond Fed's manufacturing index, new home sales and durable goods orders. But it is above all the consumer confidence index (Conference Board), at 109.8, which marked the minds of forex traders.

The agenda will remain interesting, with PCE prices on Friday. The latter is a major event in the sense that it is the Fed's favorite measure in its assessment of price dynamics... Pending the next employment report, which will be decisive by its ability to confirm or not the chronic tensions, on the creation of jobs and salaries.

Right now, the EUR/USD is trading at $1.0934.

KEY GRAPHIC ELEMENTS
The 20-day moving average (in dark blue) has just cut downwards the trajectory of its 50-day counterpart (in orange): the bearish message emerges strengthened. Note the importance of the crossing angle of these trend curves. Next intermediate threshold identified: $1.0550, a breach of which would have consequences in terms of occasional downward acceleration.

The short position will be held with discipline as long as the 20-day moving average gravitates below its 50-day counterpart (in orange).

A bevel (wedge) concentrates the energy of the spot. It just made a foray above, with no formal sign of a bullish reversal. On the contrary, the spot retraced this incursion in a handful of hours. Hence a very unattractive weekly candle (week 25). In the diamond figure, the balance is very precarious.

MEDIUM TERM FORECAST
In view of the key graphic factors that we have mentioned, our opinion is negative in the medium term on the EUR/USD parity.

Our entry point is at $1.0916. The price target of our bearish scenario is at $1.0693. To preserve the invested capital, we advise you to position a protective stop at $1.1001.

The expected return of this strategy is 223 pips and the risk of loss is 85 pips.