EUR/USD: PMI indicators are still contracting

The European currency is under pressure with PMI still in contraction. No negative surprise today on the PMIs in Europe but no expansion in activity on the horizon. The PMI in Germany is close to the lows of the Covid crisis. This afternoon the ISM manufacturing PMI index will be published and will in turn drive the trend. Technically, the European currency remains under pressure as a rate hike next September by the ECB is no longer as certain as before. Close to supports and still in an uptrend, we will continue to favour the trend with purchases on declines.

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 $1.0976. The price target of our bullish scenario is at $1.1300. To preserve the capital invested, we advise you to position a protective stop at $1.0825.

The expected return of this strategy is 324 pips and the risk of loss is 151 pips.