EUR/USD: The ECB enters the equation

After the American Central Bank yesterday, now we have to look at the ECB. Yesterday the FED raised its benchmark rate by a quarter point and said further increases may be needed, but the Fed chairman said central bank economists had backtracked on their advice that the economy would go into recession. The euro took advantage of these comments to follow the initial plan of a rebound on its daily 20-period moving average. To confirm this rebound today the ECB will have to keep a hawkish tone. A Refinitiv poll gives a consensus estimate of 3.75%, an increase of 0.25 percentage points from the current rate. We will be vigilant at 14:45 (Europe time). during the institution's press conference. In the meantime, the declines on the 20-period moving average as previously presented continue to offer entry points on the EUR. The main target is 1.15.

MEDIUM TERM FORECAST

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

Our entry point is at $1.1133. The price target of our bullish scenario is at $1.1500. To preserve the capital invested, we advise you to position a protective stop at $1.0972.

The expected return of this forex strategy is 367 pips and the risk of loss is 161 pips.