EUR/USD: The dollar is a safe haven

(BFM Bourse) – The market psychology that governs the EUR/USD currency pair remained unchanged on Friday, in a very risk-averse market already headed toward Jackson Hole, the traditional annual high block of the planet’s top money makers. Currency traders will try to choose clues that will allow them to assess the rate of increase in the Fed rates for the coming months in particular. c. Powell will give a speech there next Friday with the key to new indicators that allow to predict how high the Fed funds will rise by the September deadline: +50 or 75 basis points?

In the near future, parity is getting dangerously close to “perfect parity” (i.e. one dollar per euro), which was already reached as a reminder on July 14. This is thanks to higher bond yields, treasury bonds 10 years at 2.93%, but it’s still a long way from the 3% mark.

No major indicator is on the agenda for Friday’s session, and currency traders are digesting the latest indicators on both sides of the Atlantic. Currency traders agreed yesterday with confirming the eurozone inflation record for July at +8.9% annualized rate, on the widest basket of products. Excluding food, energy, alcohol and tobacco, price growth of +4.0% was confirmed. Across the Atlantic, weekly filings for unemployment benefits, and a manufacturing index Philly Vid interspersed with the session. These two indicators came above expectations.

In the middle of the day in the foreign exchange market, the euro traded for $1.0070 Around.

Main Graphic Elements

The bearish message is immediately reinforced by the position of the touching point of the 50-day moving average (in orange), which is the resistance since February 23. This primary trend curve is also experiencing an increase in its slope. It is a major technical standard because feedback on contact with it is lively and candid. Monday Doges It was followed by a consecutive red candle (August 16 and 17) with a particularly elongated body.

Mid-range forecast

In light of the major graphical factors we mentioned, our medium term view is negative on EURUSD.

The entry point is at $1.0059. The price target for the bearish scenario is $0.9801. To preserve your invested capital, we advise you to place a protective stop at 1.0126 USD.

The expected return of this forex strategy is 258 pips and the risk of loss is 67 pips.

Chart in daily data

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