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#1 30-04-2024 13:13:42

johnedward
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From: Paris - France
Registered: 21-12-2009
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EUR/USD: the economic calendar is dense ahead of the FOMC meeting

EUR/USD: the economic calendar is dense ahead of the FOMC meeting


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The EUR/USD continues to play the balancing act near $1.07 for ?1, in a foreign exchange market which will have to deal this week with a new meeting of the Fed's Monetary Policy Committee. But to "have a more precise timetable for the rate cut", we will certainly have to wait for the June meeting at which the macroeconomic projections will be updated", says Chris Dembik, advisor in investment strategy at Pictet AM "Meanwhile, the prospect of a rate cut continues to recede, pushing bond yields and the dollar higher."

However, all the elements of language will be good for analysis, in particular because of a concentration of statistical publications on employment and the consumer on Tuesday and Wednesday. "Wednesday will be particularly busy with two data on American employment which will be communicated before the Fed's decision the same evening: ADP and JOLTS," notes Alexandre Baradez (IG France). ADP designates, by metonymy, the survey produced monthly by the HR firm AUtomatic Data Processing, and JOLTS the report on new job offers (Job Openings and Labor Turnover Survey)

"The PCE inflation figures released last week do not suggest a more accommodating tone from the FED this week. Underlying PCE inflation, the Fed's preferred measure, did not progress in March: it stood at 2.9% in annual data, the same figure as the previous month. Over the last 4 months, this measure of inflation, mainly concentrated in services, has only slowed by 0.1. %, going from 3% to 2.9%, which is clearly insufficient for the Fed to loosen its grip."

Under these conditions, a status quo on federal rates is in any case expected. And for the next deadline, 12 June, the CME Group's FedWatch tool puts the probability of a new monetary status quo at 88.6%...

Today: the cost of labour at 14:30 (EU time), the S&P CS real estate price index at 15:00 and the consumer confidence index at 16:00.

Forex traders immediately took note of the first estimates of consumer prices in the Eurozone. Excluding food, energy, alcohol and tobacco, prices increased by 2.8% at an annualized rate, slightly above the target (+2.7%), still confirming a slowdown in inflation.

Right now, the EUR/USD is trading at $1.0719.

KEY CHART ELEMENTS
The very clear pullback on Thursday 18/04 on a resistance zone ($1.0694) 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. The succession of high points (12/28, 03/08, 03/21, 04/09 and 04/26) is now clearly decreasing.

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 $1.0734. The price target for our bearish scenario is at $1.0435. To preserve the invested capital, we advise you to position a protective stop at $1.0801.

The expected profitability of this forex strategy is 299 pips and the risk of loss is 67 pips.

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