EUR/USD: A very dense statistical menu today

The EUR/USD continues to form a pullback (graphic rejection) on $1.0550, in a chronically negative bias, against a backdrop of increasing economic imbalance between the two sides of the Atlantic.

"The eurozone is more than ever penalized by its two (former) locomotives stuck, what's more, in political blockages. While we are still wondering how France will manage to bring its public finances back on track (without, hopefully, impacting growth too much), Germany, for its part, must completely review its economic model in place since the 90s and reunification: exports to China, cheap Russian oil and gas and American protectionism. Of the three, none remain," notes Thomas Giuduci, head of bond management at Auris Gestion.

While, on the contrary, "everything seems to be going well across the Atlantic: producer prices are slowing down, tensions on the labour market are decreasing and, above all, business leaders' forecasts are reaching two-and-a-half-year highs, thanks in particular to the pro-business policy desired by the new American administration."

The stats published since the beginning of the week perfectly corroborated this dichotomy, between a gloomy IFO (German business confidence) and a healthy American consumer confidence index (Conference Board), as Thanksgiving approaches, a period that traditionally marks the start of end-of-year shopping in the US.

Furthermore, risk appetite, directly correlated to the single currency, remained thwarted by Trump's very recent comments on foreign trade. While we knew that the 45th, and soon to be 47th President of the United States, was on the offensive on customs tariffs, very concrete declarations of intent have shaken the Asian and European stock markets.

He wants to impose 25% customs duties on all products from Mexico and Canada and increase those by 10% for products imported from China. Donald Trump justifies these trade retaliation measures in retaliation for illegal immigration, and drug trafficking and in particular Fentayl, a powerful opioid that is wreaking havoc in the United States.

On the macroeconomic agenda today, to be followed as a priority on the American side, the preliminary data of Q3 GDP, weekly unemployment benefit applications, durable goods orders, the Chicago PMI, PCE prices and household spending and income, among other delights.

Right now, the EUR/USD is trading at $1.0535.

KEY CHART ELEMENTS
The currency pair has just come out of a wedge pattern, in intense volatility, which confirms the bearish bias, now in place. Since the fragile supports break one after the other. Negative opinion maintained. Nevertheless at this stage the decline, the formation of a technical rebound cannot be long in coming, we are watching for signs.

MEDIUM-TERM FORECAST
In view of the key graphic factors that we have mentioned, our opinion is negative in the medium term on the EUR/USD.

Our entry point is at $1.0516. The price target of our bearish scenario is at $1.0101. To preserve the capital invested, we advise you to position a protective stop at $1.0656.

The expected profitability of this Forex strategy is 415 pips and the risk of loss is 140 pips.