EUR/USD: What's new with the pair?

In a market finally focused this Thursday on the results of EU companies (Ayden, Unilever, Astrazeneca, Credit Agricole), the euro remains stable against the dollar, at the top of the short wedge, in delicate position in the short term.

For strategists at Pictet Wealth Management, "it's too early to conclude that the labour market is warming up again, given other data showing a general cooling trend. But the report raises the risk of a re-acceleration of the economy, which would certainly fuel bets on later rate cuts, and reduce their cumulative magnitude over 2024. Powell clearly opposed a rate cut starting in March, and the NFP report closes the door even more."

Yesterday, several Fed executives put forward a militant argument for a calm attitude, without urgency for the start of monetary easing. Once this easing has begun, there is no reason to adopt a significant pace of loosening the tap.

Right now, the EUR/USD is trading at $1.0759.

KEY CHART ELEMENTS
Interestingly technical fact, the 20-day moving average (in dark blue, bearish), is currently breaking its 50-day moving average (in orange, horizontal), a first contact since November 13. The graphic and technical situation is tensing under this trend line. The angle of attack is, however, not very important. This trend curve, the first mentioned, which accelerates downward, will conveniently serve as a trailing stop).

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 $1.0773. The price target for our bearish scenario is at $1.0436. To preserve the invested capital, we advise you to position a protective stop at $1.0856.

The expected profitability of this Forex strategy is 337 pips and the risk of loss is 83 pips.