EUR/USD: Already back below chart resistance levels

The EUR/USD, against a short-term resistance zone, maintained a fundamental bearish bias, a bias fueled by the gap in "remuneration", present and future, between the two spot currencies. J Powell, head of the Fed, is unlike his European counterpart, C Lagarde, "forced" to restraint in his monetary easing process. The latest inflation figures (PCE, CPI, IPP), as well as the chronic tensions on the employment front in a flourishing economy, are the matrix.

Furthermore, "US trade and migration policies are associated with an increase in inflationary risk. Tariffs could lead to higher prices for goods, both directly, if retaliatory measures against the US increase import costs, and indirectly through supply chain disruptions. Only a generalized and lasting increase in tariffs would have a significant impact on inflation", according to Claudia Panseri, CIO at UBS WM France.

On Wednesday, the Fed will publish its traditional "Minutes", i.e. the chronological report of the discussions of the last FOMC (Monetary Policy Committee). The powerful monetary institution "should confirm that the central bank is significantly revising downwards its rate cut outlook. We are now counting on a terminal rate of 4.25% (i.e. an additional rate cut)", according to Chris Dembik, investment strategy advisor at Pictet AM

Nevertheless, the euro, an excellent gauge of risk appetite on financial markets, has regained some momentum last week, against a backdrop of hope for peace, or at least a ceasefire, in Ukraine.

US President Donald Trump spoke on Wednesday, 12 February, for nearly one hour by phone with Vladimir Putin. An exchange that had never been so long between Moscow and Washington since the start of the Russian invasion of Ukraine in February 2022. The 47th President of the United States decided with Vladimir Putin to launch "immediate" negotiations on Ukraine. The two men also agreed to meet in person.

In the immediate future, currency traders have just learned of the trade balance in the Eurozone, whose surplus is in line with expectations for the month of December, at +14.5 billion euros.

No American figures are expected today. Note that currency traders will be deprived this Monday of a valuable benchmark, that of Wall Street, which will remain closed due to a public holiday (Presidents' Day).

Right now, the EUR/USD is trading at $1.0477.

KEY CHART ELEMENTS
The 50-day moving average (in orange) continues to constitute a solid technical and graphic barrier. In the shorter term, it is even its 20-day counterpart (in dark blue) that acts as dynamic resistance. And this without the RSI oscillator positioning itself in the oversold zone. In the immediate future, the currency pair is tracing a negative harami structure in the upper part of the Bollinger bands. Once perfect parity is reached, namely $1 = 1 euro, an energetic buying reaction of protest could then take place.

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 $1.0483. The price target of our bearish scenario is at $1.0001. To preserve the capital invested, we advise you to position a protective stop at $1.0611.

The expected profitability of this forex strategy is 482 pips and the risk of loss is 128 pips.