EUR/USD: A big day today for traders

KEY CHART ELEMENTS
Crucial day today for currency traders, with the publication of US inflation figures, also known as the CPI. A better-than-expected statistic would disappoint investors because it would potentially push back rate cuts anticipated by the market. In fact, investors expect a 69% probability of a rate cut starting next March. At this stage investors are dismissing the comments of Fed members who do not confirm their scenario. For example, John Williams, president of the New York branch of the Fed and a member of the Federal Open Market Committee responsible for setting interest rates, indicated that a slowdown in qualitative tightening was still far away. He added that he was not aligned with expectations that the US central bank would ease monetary policy as early as March. Technically the European currency has remained neutral for several days now, awaiting American statistics. In the $1.10 zone we will favor sales to aim for a return to $1.07.

MEDIUM TERM FORECAST
Considering the key graphical factors that we have mentioned, our opinion is negative in the medium term on the EUR/USD.

Our entry point is at $1.0973. The price target for our bearish scenario is at $1.0700. To preserve the invested capital, we advise you to position a protective stop at $1.1158.

The expected profitability of this forex strategy is 273 pips and the risk of loss is 185 pips.