EUR/USD: Bias is to the upside

Traders are currently reacting negatively to announcements from the European Central Bank. The latter announced, as expected by the markets, an increase in its key rate by a quarter of a point, which brings its deposit rate to 3.75%, its highest level since 2000. More generally on the market for changes we will closely monitor the evolution of the Japanese currency, the yen. Indeed, the Central Bank of Japan has said that it will continue to cap the yield on 10-year government bonds at 0.5%, but that it will allow long-term interest rates to rise above this level for an unspecified amount. This announcement caused bond yields to rise and the yen to fluctuate. Technically, the European currency is still evolving in an upward trend in the medium term but is bearish in the short term. We will therefore exploit the levels of declines such as the moving averages to build long positions in order to aim for a new test of the annual highs.

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 $1.0956. The price target of our bullish scenario is at $1.1300. To preserve the invested capital, we advise you to position a protective stop at $1.0828.

The expected return of this forex strategy is 344 pips and the risk of loss is 128 pips.