EUR/USD: The macroeconomic calendar is dense

The Dollar continues to maintain a small advantage against the Euro in the context of the rise in 10-year federal rates.

"In January, financial markets anticipated a cut in the key rate of 165 basis points by the end of the year, or almost seven rate cuts. Today, fewer than two cuts are planned. Bond rates 10-year bonds reached their level of last November by climbing 85 basis points to 4.7%, and the stock markets have lost almost 4% since the announcement of the latest inflation figures", says Herve Thiard, Managing Director of Pictet Management.

The estimate of the trajectory of federal rates has been turned upside down in the space of a few months. And the PCE prices, the Fed's preferred barometer in its assessment of price dynamics, which will be published on Friday, will make it possible to further adjust this estimate.

"These market movements were exacerbated by the Fed chairman who indicated that the "lack of further progress" on inflation meant that rate cuts would be delayed, marking his second change of course in four months, after that of December which signaled the start of a cycle of monetary easing. The revision of market expectations and the pivot on the pivot of the Fed now seem more aligned with American economic reality."

Consumer confidence remains high, and we will be able to get a concrete glimpse of this tomorrow with the very first estimates of US GDP for the first quarter.

Note this morning the publication of the IFO business climate index in Germany, up slightly to 89.5, above the target formed by the expectations of the financial community.

Right now, the EUR/USD is trading at $1.0690.

KEY CHART ELEMENTS
The very clear pullback on Thursday 18/04 on a resistance zone ($1.0693) will invite people to take short positions again on the EUR/USD, especially as the break of the 50-day moving average (in orange) by its counterpart at 20 days (in dark blue) was done at a relatively large angle.

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 $1.0683. 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 $1.0801.

The expected profitability of this strategy is 247 pips and the risk of loss is 118 pips.