EUR/USD: IMF head gives reveals some details...

KEY CHART ELEMENTS
The fog is clearing somewhat regarding potential future rate cuts. Indeed, the ECB should reduce its interest rates during the summer, declared its president Christine Lagarde, while the latter spoke at the World Economic Forum in Davos. She added that policymakers should have enough wage data by the end of spring to decide whether inflation in the euro zone will continue to fall. This information comes as the USD has strengthened in recent days following hawkish comments from members of the Fed and US macro stats showed the resilience of the economy. Next, traders await U.S. existing home sales figures, and will also pay attention to the Michigan Consumer Confidence Index at 16:00 (EU time). Traders are reassured as the US House of Representatives just passed a short-term budget bill that will avoid a partial government shutdown. In effect, the agreement extends government spending at current levels for some federal agencies until March 1 and for others until March 8. The only downside is persistent geopolitical tensions with continued Anglo-American operations against the Houthis in Yemen who continue to attack merchant and military ships near their territorial waters. Technically the European currency is still under downward pressure under weekly resistance and should therefore reach its first support in the $1.07 zone.

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 $1.0883. 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 183 pips and the risk of loss is 275 pips.