USD Index Price Analysis: Further upside targets the 2023 high at 105.60


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The index adds to the ongoing rebound and approaches 104.00.
Gains could now accelerate to the 105.60 region in the near term.

The dollar’s march north remains unabated on Tuesday and encourages DXY to challenge the 55-day SMA near 103.80.

In the near term, further gains appear in the pipeline while above the 3-month support line near 101.90. That said, the next target of note now emerges at the 2023 peak at 105.63 recorded on January 6.

In the longer run, while below the 200-day SMA at 106.45, the outlook for the index remains negative.

DXY daily chart

 

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US Dollar Bumped by Hawkish Fed and the RBA Joins the Rate Hike Party. Higher USD?

US Dollar, Crude Oil, Gold – Talking Points

US Dollar resumed strengthening yesterday but has slipped todayThe Fed reminded markets of their intention and yields respondedIf Fed Chair Powell is hawkish today, will that drive the DXY (USD) Index up?

Recommended by Daniel McCarthy

Get Your Free USD Forecast

The US Dollar is treading water so far today after massive gains across the board thanks to Fed commentary for higher rates raising the prospect of a hawkish Fed Chair later today.

Yesterday, Atlanta Fed President Raphael Bostic highlighted that the tight labour market seen in Friday’s data might mean that the peak in rates could be higher than where the market is currently pricing.

Futures and swaps markets are now pricing a 2023 peak in US rates above 5.10%, up from below 4.90% last week.

The comments lifted Treasury yields across the curve with the short end seeing the largest bump. The benchmark 2-year note fell just short of 4.50% in the US session and all bond yields have eased a touch in the Asian session so far today, in line with a softening US Dollar.

Wall Street finished their day lower with the Nasdaq notching a 1% decline. APAC equities have had a quiet day with Australia’s ASX 200 slightly in the red, Japan’s Nikkei 225 fairly flat and Chinese markets scratched out small gains

The RBA hiked rates by 25 basis points today in a somewhat pastiche approach to monetary policy after the Fed’s re-acceleration toward hawkishness. The move boosted the Aussie Dollar and has been the biggest gainer against the greenback.

It is being reported that Washington is planning to slap a 200% tariff on Russian Aluminium in the next week or 2.

The Japanese Yen is firmer after solid wage data raised speculation that the Bank of Japan might reconsider its ultra-loose monetary policy stance.

Crude oil is slightly firmer with the WTI futures contract near US$ 74.75 bbl and the Brent contract is a touch above US$ 81.50 bbl. Gold is steady at around US$ 1,875 an ounce at the time of going to print.

In other news, the New York Stock Exchange (NYSE) has agreed to pay 60% of claims from the trading glitch last month.

The focus later today will be Fed Chair Jerome Powell’s speech at the Economic Council in Washington. The very strong labour market, and Bostic’s comments yesterday might have laid the groundwork for stronger hawkish rhetoric from the chief rate setter.

The full economic calendar can be viewed here.

Recommended by Daniel McCarthy

How to Trade EUR/USD

DXY (USD) INDEX TECHNICAL ANALYSIS

The DXY Index is testing the upper band of an ascending trend channel today after it recovered from a seven-month low seen last week.

The 55-day simple moving average (SMA) is just above the trend line and may offer resistance.

Further resistance could be at the prior peaks of 105.63, 105.82, 107.20 and 107.99.

On the downside, support may lie at the breakpoint of 101.30 or down at the previous lows of 100.82, 9957 and 99.42.

Chart created in TradingView

— Written by Daniel McCarthy, Strategist for DailyFX.com

Please contact Daniel via @DanMcCathyFX on Twitter

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EUR/USD Forecast for 2023-2026 and Beyond

2023.02.06 2023.02.06
EUR/USD Forecast for 2023-2026 and Beyondlogo

EUR/USD is one of the major currency pairs. It means that it’s one of the most traded pairs in Forex. However, traders around the globe try to predict its future price for more than opening successful trades. The direction of EUR/USD may reflect the strength of either the EU or US economy. Moreover, the EUR to US dollar rate may reflect the overall global market sentiment.  

As the pair is widely traded, it may be hard to forecast its rate for the long term. The Euro/US dollar rate is subject to such factors as interest rate differences, inflation, jobs data, trade, and capital flows. Simultaneously, a large part of the pricing is also related to ‘event’ risks that cannot be gauged in advance. Let’s go more in-depth in this Euro to Dollar forecast.

The article covers the following subjects:

EUR/USD Current Rate

The current rate of the EUR/USD pair is $1.07817. Below, you can see an interactive chart from Forex in real-time:

 

Characteristic Features of the EUR/USD Pair

The EUR/USD pair belongs to the major currency pairs (majors) and is characterized by increased liquidity. This is not surprising, as it includes two of the world’s major reserve currencies: USD and EUR. It is in the euro/dollar that the largest volume of transactions is made during daily trading on the Forex market (approximately 20% of the total volume).

The behavior of the EUR/USD pair is a kind of indicator showing the comparative state of the US and EU economies. If the US economy is growing steadily, and problems arise in the EU, this might cause a EUR to US dollar fall. Conversely, if there is a decline in growth rates in the US and the Eurozone demonstrates good performance, the EUR/USD pair will grow. Let’s consider the main trading characteristics of this pair:

Active trading hours – the pair is traded around the clock except for weekends. It is most active during the European and American trading sessions. At this time, the largest trading volumes take place, and the main movements of the EUR/USD pair take place.

Volatility – the EUR/USD pair is characterized by medium volatility. During the release of important data, the pair is capable of making strong movements from 100 points and above. But in general, if you look at the historical data, the average daily volatility of the EUR/USD pair is about 80 pips.

Spread is one of the main advantages of this pair. Due to the highest liquidity, the spread for the EUR/USD pair is minimal. On popular ECN accounts, the spread is usually less than 1 pip.

The Dollar in 2023: More Predictable?

Perhaps the direction of the dollar will become a little easier to predict under President Biden. First of all, financial markets are counting on the new US president to run less internationally and deal more diplomatically with trade disputes. This provides more peace and security in the financial markets, reducing the need for a haven such as the dollar.

Also, Biden is expected to spend (a lot) of money to continue to stimulate the US economy, including post-corona, which will further increase the US’s debt position. The fact that interest rates will remain low for a longer period also plays a role: at the most recent meeting of the Federal Reserve, Chairman Jerome Powell hinted that he would not have an interest rate hike until mid-2023.

All of this leads to an estimate that capital flows towards emerging markets and currencies will continue to flow at the US dollar expense. Countries such as Indonesia and Mexico have aggressively lowered their interest rates, but interest rates in these countries are still considerably higher than in the United States.

Besides, countries such as China, South Korea, and Taiwan have had the coronavirus outbreak reasonably under control for some time now. In combination with optimism about the arrival of COVID vaccines, this means that investors are, in any case, moving to more risky markets.

EURUSD Technical Analysis

To make up a realistic forecast for the EURUSD, it is necessary to conduct a deep technical analysis on different timeframes. Let’s start by studying the EURUSD monthly chart.

Until the summer of 2020, the euro price was moving within a multi-year downtrend. In July 2020, the blue trend line was broken upside at the level of $1.16. It is impossible to say with certainty about the reversal of the price movement or the imminent downtrend continuation due to the lack of appropriate signals.

In the near future, the market is likely to remain in a sideways trend. If significant fundamental factors do not affect the Euro exchange rate, then expect the trading in the range of 1.06-1.25 US dollars for the next year. The upper and lower borders of the trading channel are determined by local lows and highs that were formed at the peaks of trading activity in February 2018 and March 2020. These extremes are marked with blue marks on the chart.

EURUSD price prediction for next three months

Let’s continue a technical analysis on the weekly chart and use the MACD indicator to get additional signals.

As the chart shows, the indicator has been in a hidden bullish divergence towards price in recent months. MACD moving averages are below the price level. Therefore, we can conclude that the forecasted value shortly will not decline for long, if at all. The lower border of the channel at 1.06 USD serves as a support level.

Starting in April, expect a slow reversal of the price up. It will continue to move in this direction over the next three months. So far, there are no fundamental reasons for a serious strengthening of the Euro against the US Dollar. Most likely, growth will be limited by the upper border of the trading channel at 1.15 USD, which was formed in 2015 and 2016. The beginning of the upward movement will be confirmed by the crossing of the signal line by the MACD line from the bottom up.

What will be the price of euro in 2022?

To make a long-term forecast, let’s use Bollinger Bands on the chart to make up a price history analysis.

After analyzing the overall market’s potential and the dynamics of changes in Bollinger Bands depending on the market situation, we can conclude that over the next 12 months the EURUSD rate will be in the range of 1.06 – 1.15 USD. Growth towards the upper border of the channel is likely to be very volatile. Bullish impulses will be replaced by short-term corrections, after which the upward movement will continue.

Expect at least one strong correction in the summer and late fall of 2022. The potential target of the local bullish trend is the level of 1.15 USD, which serves as the upper border of the multi-year trading channel.

Monthly EURUSD price forecast for 2022/2023

Based on the forecast above, I made up the expected EURUSD trading ranges for each month of 2022/2023. The table below shows the projected market lows and highs for the designated period.

Month

EURUSD price

Minimum $

Maximum $

March 2022

1,07

1,12

April 2022

1,06

1,09

May 2022

1,07

1,11

June 2022

1,09

1,14

July 2022

1,12

1,15

August 2022

1,11

1,14

September 2022

1,09

1,13

October 2022

1,08

1,10

November 2022

1,05

1,095

December 2022

1,06

1,09

January 2023

1,07

1,095

February 2023

1,085

1,10

Long-term EURUSD trading plan

Given the EURUSD potential, expected highs, lows, and targets, it is possible to draw up a trading plan that will help you get profit with minimal risk.

Enter trades after the expected growth is visible on the price chart and confirmed by a distinct signal. This can be the intersection of the MACD lines on a weekly timeframe or the appearance of a reversal candlestick pattern. The approximate entry level is around 1.07 USD (marked with a blue line on the chart). 

Stop-loss should be placed below the border of the trading channel, that is the level of 1.06 USD (marked with a red line). Place take profit at the level of the upper border of the channel, around 1.15 USD (marked with a green line). This is an important psychological mark, which the future price is unlikely to overcome on the first try.

Follow personal risk management rules, take care of yourself and your money!

EURUSD technical analysis is presented by Mikhail Hypov.

Euro/dollar weekly price forecast as of 06.02.2023

EURUSD was corrected down last week and reached support (A) 1.0821 – 1.0800. The support zone has not been broken out, so one could enter new purchases with a target at the high of last week. 

If support (A) is broken down, the price will reach support (B) 1.0715 – 1.0683. After support (B) is tested, I suggest taking a pause and watching the buyers’ reaction. If there is upward momentum, one could enter long trades with a target at the high of last week. 

If the price breaks out level 1.0683 and consolidates below, the trend will turn down and it will be relevant to sell the instrument.

EURUSD trading ideas for the week:

Buy according to the pattern at support (А) 1.0821 – 1.0800. TakeProfit: 1.1026. StopLoss: according to the pattern rules.Buy according to the pattern at support (В) 1.0715 – 1.0683. TakeProfit: 1.1026. StopLoss: according to the pattern rules.

Technical analysis based on margin zones methodology is presented by an independent analyst, Alex Rodionov.

Read on to find out the EUR/USD forecast for the upcoming years!

Analytical Agencies’ EUR/USD Forecast for the Rest of 2022

EUR/USD has lost a lot from the beginning of the year to the beginning of March. Will the pair have a chance to recover?

Trading Economics

According to global macro models and the expectations of analysts’ from Trading Economics, the pair may trade at 1.09 by the end of March. By July, the Euro/US dollar rate may fall to 1.08. By the end of the year, the price may decline to 1.07. The downtrend seems insignificant. However, if you compare the future rate to the previous one, you will see that the pair has been weakening. 

Long Forecast

Below is a EUR/USD prediction chart for 2022. The Economy Forecast Agency is more pessimistic than Trading Economics. The price will fall below $1 by the end of the year. The price record of $1.12 will be recorded in March, while the lowest price will be hit in November. It’s worth knowing that the pair will mostly trade at lows last seen in 2002. 

Month

Open

Low-High

Close

2022

Mar

 

1.034-1.122

1.050

Apr

1.050

1.004-1.050

1.019

May

1.019

1.003-1.033

1.018

Jun

1.018

0.990-1.020

1.005

Jul

1.005

0.995-1.025

1.010

Aug

1.010

0.974-1.010

0.989

Sep

0.989

0.972-1.002

0.987

Oct

0.987

0.953-0.987

0.968

Nov

0.968

0.949-0.977

0.963

Dec

0.963

0.950-0.978

0.964

PandaForecast.com

PandaForecast.com is quite optimistic about the pair’s future. By the end of the year, the price will be able to reach the highs recorded in January and February 2022.

Month 

Average target 

Pessimistic forecast 

Optimistic forecast

Volatility, % 

Apr

1.0692

1.0369

1.0922

5.06 

May

1.0998

1.0647

1.1367

6.34 

Jun

1.0942

1.0740

1.1131

3.51 

Jul

1.1168

1.0797

1.1351

4.88 

Aug

1.1261

1.1167

1.1517

3.04 

Sep

1.1129

1.1031

1.1405

3.28 

Oct

1.1335

1.1149

1.1511

3.14 

Nov

1.1506

1.1371

1.1748

3.21 

Dec

1.1516

1.1216

1.1758

4.61 

EUR/USD Forecast for 2023

2023 projections vary. One source expects the pair to trade at the lows of 2002, while another one sees the pair at the highs of 2014. Have a look. 

Long Forecast

In 2023, the overall market trend is expected to be bullish. Still, the pair won’t be able to reach the highs of previous years. The pair will be still at the lows of 2002. 

Month

Open

Low-High

Close

2023

Jan

0.964

0.921-0.964

0.935

Feb

0.935

0.935-0.965

0.951

Mar

0.951

0.951-0.990

0.975

Apr

0.975

0.933-0.975

0.947

May

0.947

0.928-0.956

0.942

Jun

0.942

0.921-0.949

0.935

Jul

0.935

0.935-0.972

0.958

Aug

0.958

0.958-0.997

0.982

Sep

0.982

0.960-0.990

0.975

Oct

0.975

0.943-0.975

0.957

Nov

0.957

0.954-0.984

0.969

Dec

0.969

0.969-1.013

0.998

PandaForecast.com

PandaForecast.com predicts a solid uptrend that will lead the EUR/USD price to the highs of 2014. The volatility degree won’t exceed average levels.  

Month 

Average target 

Pessimistic forecast 

Optimistic forecast

Volatility, % 

Jan

1.1066

1.0931

1.1335

3.57 %

Feb

1.1080

1.0889

1.1266

3.35 %

Mar

1.1261

1.0902

1.1507

5.26 %

Apr

1.1167

1.0796

1.1270

4.20 %

May

1.1101

1.0817

1.1250

3.85 %

Jun

1.1567

1.1295

1.1844

4.64 %

Jul

1.1805

1.1632

1.2162

4.36 %

Aug

1.2217

1.2099

1.2335

1.91 %

Sep

1.2581

1.2254

1.2750

3.90 %

Oct

1.2872

1.2585

1.3012

3.28 %

Nov

1.2753

1.2405

1.3037

4.85 %

Dec

1.2796

1.2468

1.3167

5.31 %

EUR/USD Forecast for 2024

In 2024, the EUR/USD pair won’t hit new maximums. Still, it may trade at good levels. 

Long Forecast

In 2024, EUR/USD may finally break above $1. Nevertheless, the source doesn’t give chances to the pair again. By the end of the year, the euro will trade below $1 against the US dollar. The maximum rate will be set in September when the pair is expected to touch $1.04.  

Month

Open

Low-High

Close

2024

Jan

0.998

0.994-1.024

1.009

Feb

1.009

1.008-1.038

1.023

Mar

1.023

1.000-1.030

1.015

Apr

1.015

1.001-1.031

1.016

May

1.016

0.995-1.025

1.010

Jun

1.010

0.984-1.014

0.999

Jul

0.999

0.999-1.032

1.017

Aug

1.017

0.990-1.020

1.005

Sep

1.005

1.005-1.040

1.025

Oct

1.025

1.005-1.035

1.020

Nov

1.020

0.997-1.027

1.012

Dec

1.012

0.971-1.012

0.986

PandaForecast.com

PandaForecast.com expects the pair to rise until September. After that, trades may see a downtrend. Still, the prediction is optimistic. The average price in December 2024 is anticipated to be $1.2896.

Month 

Average target 

Pessimistic forecast 

Optimistic forecast

Volatility, % 

Jan

1.2962

1.2761

1.3164

3.06 %

Feb

1.2739

1.2456

1.3071

4.71 %

Mar

1.3130

1.2705

1.3422

5.34 %

Apr

1.3201

1.2769

1.3456

5.11 %

May

1.3113

1.2964

1.3476

3.80 %

Jun

1.3630

1.3310

1.3854

3.93 %

Jul

1.3590

1.3219

1.3950

5.24 %

Aug

1.3642

1.3493

1.3991

3.56 %

Sep

1.3401

1.3131

1.3531

2.95 %

Oct

1.2934

1.2586

1.3244

4.96 %

Nov

1.2890

1.2495

1.3058

4.31 %

Dec

1.2896

1.2479

1.3102

4.75 %

Long-Term Euro to USD Forecast 2025-2026

Any long-term forecast is not reliable. Market conditions change daily. Thus, a long-term prediction for the EUR/USD pair should be taken with a grain of salt. You won’t find a EUR/USD projection for  2025-2030. However, we found some data for 2025 and the beginning of 2026. 

Long Forecast

The Economy Forecast Agency is still negative about the bright future of the EUR/USD pair. The rate will barely close above $1 in 2025. In 2026, the pair won’t rise above $1 at all. 

Month

Open

Low-High

Close

2025

Jan

0.986

0.986-1.018

1.003

Feb

1.003

0.984-1.014

0.999

Mar

0.999

0.984-1.014

0.999

Apr

0.999

0.971-1.001

0.986

May

0.986

0.964-0.994

0.979

Jun

0.979

0.975-1.005

0.990

Jul

0.990

0.975-1.005

0.990

Aug

0.990

0.951-0.990

0.965

Sep

0.965

0.952-0.980

0.966

Oct

0.966

0.945-0.973

0.959

Nov

0.959

0.945-0.973

0.959

Dec

0.959

0.945-0.973

0.959

2026

Jan

0.959

0.916-0.959

0.930

Feb

0.930

0.897-0.930

0.911

Mar

0.911

0.907-0.935

0.921

Apr

0.921

0.891-0.921

0.905

PandaForecast.com

The source sees a continuation of the bullish trend in 2025. Although the uptrend will be replaced with a downtrend, the pair may hit the highs of 2011.  

Month 

Average target 

Pessimistic forecast 

Optimistic forecast

Volatility, % 

2025

Jan

1.2652

1.2323

1.2939

4.76 %

Feb

1.3045

1.2634

1.3412

5.80 %

Mar

1.2963

1.2636

1.3137

3.81 %

Apr

1.2930

1.2632

1.3186

4.20 %

May

1.3376

1.3039

1.3595

4.09 %

Jun

1.3702

1.3299

1.3920

4.46 %

Jul

1.3794

1.3435

1.4222

5.54 %

Aug

1.3249

1.3021

1.3566

4.02 %

Sep

1.3466

1.3099

1.3862

5.51 %

Oct

1.3534

1.3193

1.3705

3.73 %

Nov

1.3466

1.3126

1.3867

5.34 %

Dec

1.3455

1.3291

1.3669

2.77 %

Which Factors Affect the Quotes of the EUR/USD Currency Pair?

The EUR/USD rate is the ratio of the currencies of the two largest economies in the world – the EU and the USA. Therefore, important economic and political news from the EU and the US directly affects the euro-dollar rate. These factors of influence are called fundamental; in addition to them, there are also technical ones. Let’s consider both those and others in more detail:

Fundamental Factors

There are several important economic indicators for the US and EU. The most significant factors affecting the course of the pair include the following:

Change in interest rates of the ECB and the Fed

Unemployment Rate

Data on jobs created in the US (Nonfarm Payrolls)

Growth rate of GDP

Inflation indices (CPI, PPI)

Industrial production (Industrial Production index)

Retail Sales

Trade balance

Consumer Confidence Index

Indices of business sentiment (ISM, IFO)

Speeches by top officials – press conferences of the heads of the ECB and the Fed, speeches, and comments by leading politicians from the EU and the United States.

Political events – various reshuffles in the government, elections, popular unrest, internal political instability (e.g., Brexit)

Force majeure – extraordinary events, natural disasters, man-made disasters, terrorist attacks, epidemics

Technical Factors

Active trend – an essential technical factor for trading is the presence of an active trend. In an uptrend, purchases are preferable; in a downtrend, sales are recommended, in a sideways trend (range), trading in both directions from the boundaries of the price range is appropriate.Important support and resistance levels are historical highs and lows on the price chart. These are important price reference points for analyzing and predicting the future movement of the pair.Price patterns – various patterns of continuation or reversal of a trend from classical technical analysis, candlestick patterns, and Price Action patterns.

History of the EUR/USD Pair

The Euro (EUR) is a fairly young currency that was born in 1999. The single European currency has replaced a whole galaxy of the EU countries’ national currencies: The Deutsche mark, the French franc, the Italian lira, and others. Therefore, one of the euro’s features is its susceptibility to macroeconomic statistics of the entire Eurozone and individual EU countries’ indicators.

The European currency was officially introduced into non-cash circulation on January 1, 1999, and on January 1, 2002, banknotes and coins were introduced into cash circulation. In terms of the volume of use in international payments, the euro is second only to the US dollar. It is also the second most popular (after USD) reserve world currency. At the time of the official start of trading, the EUR/USD rate was in the 1.1800 area.

Since the beginning of trading in 1999, the EUR/USD pair has undergone significant changes. In the first two years, the euro’s prospects were still vague, and the quotation was declining, reaching a minimum of around 0.8200. The pair then rallied for seven years, reaching an all-time high of 1.6039 in 2008. In subsequent years, due to the banking crisis’s influence and various problems in the Eurozone, the pair corrected significantly.

The pair was in a dramatic bearish trend until April 2015. After that, the pair started recovering. The Covid-19 breakout pushed the price up. 

In terms of market sentiment, 2020 was a very illustrative year. During the first coronavirus wave in March, the market was unpleasantly surprised by the severity, magnitude, and impact of the coronavirus pandemic, causing investors to flee to the dollar as a safe haven.

Initially, the coronavirus was thought to be “a Chinese problem only.” Still, as the virus began to spread faster worldwide – locking up economies around the world – the dollar exchange rate was recalibrated in no time. 

A similar revision took place three months ago but in the opposite direction. When pharmaceutical company Pfizer released positive vaccine news in early November, the dollar fell in value due to the disappearance of the need for a safe haven. 

In both cases, the market reaction was apparent, but that is not always the case. Take the announced financial support packages from the European Central Bank (ECB) this year. Whereas in the past, the availability of more euros often caused downward pressure on the euro, such packages resulted in an upward price movement this year.

Coronavirus support was “suddenly” perceived as positive by the market. According to investors, the ECB showed it was doing everything it could to prevent companies from collapsing and safeguard employees’ jobs.

Precisely because of the occurrence of unforeseen market conditions and the sometimes-surprising market reaction to them, our starting point is that you should always take price estimates with a grain.

For example, at the end of 2018, many market parties anticipated a weaker dollar, but in 2019 the dollar picked up with the US-Chinese trade war as a catalyst. That created a lot of uncertainty, causing capital to flow to safe havens like the dollar. Such events are difficult to envision, and this was especially true in recent years with a fickle character like Donald Trump at the helm in the United States.

The pair was quite strong until April 2021. However, a new downtrend took place after. If you check the historical price actions, you will notice that the pair simply follows traditional trends.  

To check how has the rate of EUR/USD changed over time, please follow this link to the extended historical price chart. 

Is EUR/USD Still a Good Investment?

Due to its enormous liquidity, projection, availability, and low spread, the EUR/USD currency pair enjoys well-deserved popularity among traders. As of March 2022, the pair follows its traditional downtrend. Thus, some sources predict the pair’s fall in 2022. Below is a EUR/USD prediction chart for 2022: 

Month

Open

Low-High

Close

Mar

 

1.034-1.122

1.050

Apr

1.050

1.004-1.050

1.019

May

1.019

1.003-1.033

1.018

Jun

1.018

0.990-1.020

1.005

Jul

1.005

0.995-1.025

1.010

Aug

1.010

0.974-1.010

0.989

Sep

0.989

0.972-1.002

0.987

Oct

0.987

0.953-0.987

0.968

Nov

0.968

0.949-0.977

0.963

Dec

0.963

0.950-0.978

0.964

Source: Longforecast.com 

But what does the EUR/USD forecast predict for the distant future? It’s important to remember that any long-term forecasts, even the EUR/USD forecast, or any other currency pair, are too unreliable to believe in. Too many factors may affect the rate of the currency pair, and it’s best to be up-to-date with what’s happening in the global arena in order to make realistic and reliable predictions.

If you do decide that trading this currency pair is something for you, and you believe in the future of the Euro vs. US Dollar pair, first, you need to decide on a suitable trading method for you and work it out first on a demo account, and then on a real account. A great reason to create a free demo account on LiteFinance! LiteFinance has fact-checked information and a user-friendly platform with an outlook for novices as well as experienced traders and investors.

By the time of transactions, you can trade as follows:

Intraday – trading without carrying over the position to the next day. It is characterized by narrow stop-loss and take-profit orders, requiring a trader to spend a lot of time in front of a monitor and strict discipline, and is available even with a small deposit.

Medium-term – the duration of transactions from several hours to two-three days. The medium-term trading implies wider stop-loss and take-profit orders, takes less time, and requires a more substantial trading account size.

Long-term – trades are held for several weeks or even for months. This trading style is more suitable for investors. 

 

Disclaimer: The information in this statement is not intended as individual investment advice and should therefore be seen as an investment recommendation. This recommendation has been drawn up by LiteFinance and/or third parties and does not match your personal financial situation, your knowledge and experience, your investment objective and/or horizon, and your risk profile and/or tolerance. You are therefore responsible for correctly assessing whether this investment is suitable for you in relation to your financial situation and your investment objectives.

Price chart of EURUSD in real time mode

The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteFinance. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.

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US Dollar Blazes Higher on Solid Data as Geopolitics Play Out. Where to for USD?

US Dollar, DXY Index, USD, NFP, Fed, BoJ, USD/JPY, Nikkei 225, China – Talking Points

US Dollar resumed strengthening today after Friday’s massive rallyRisk assets appear vulnerable as Fed rate hike expectations re-accelerateIf the US economy is booming, will the Fed act and what will it mean for USD?

Recommended by Daniel McCarthy

Trading Forex News: The Strategy

The US Dollar continues to fight back after a blistering jobs report on Friday showed that the Fed might have more heavy lifting ahead to rein in inflationary pressures.

The ramifications of the massive beat of US total nonfarm payrolls (NFP) data continued to play out through the Asian session on Monday.

517k jobs were added in January according to the US Bureau of Labour Statistics, way above the 188k anticipated and last month’s read of 223k was also revised up to 260k. This put the unemployment rate at 3.4%, below the 3.6% forecast and 3.5% previously.

Treasury yields are higher, adding to large gains seen at the end of last week with the 2-year part of the curve seeing a generous uptick as it traded back above 4.35% after visiting 4.04% last week.

The Aussie and Kiwi Dollars have been hardest hit in the currency space as high beta risk assets tumble on the prospect of tighter monetary policy from the Fed.

USD/JPY is notably higher after the Nikkei newspaper reported that the Bank of Japan (BOJ) Deputy Governor Masayoshi Amamiya has been sounded out to take the top job when Haruhiko Kuroda steps down in April.

He is seen as maintaining the current relatively loose monetary policy. The Nikkei 225 equity index bucked the broader weakness in stock markets, trading in the green. Hong Kong’s Hang Seng index was down over 2.3% at one stage. Futures are pointing to a soft start to the Wall Street cash session.

The backdrop to market gyrations today is engulfed by the Chinese balloon saga that has Sino-US relations turning icy once more. The cancellation of Secretary of State Antony Blinken’s visit to Beijing might disrupt China’s smooth economic transition out of the pandemic era.

Gold is languishing near Friday’s low under US$ 1,870 an ounce. Similarly, crude oil is struggling to make headway with the WTI futures contract trading near US$ 73.50 bbl while the Brent contract is around US$ 80 bbl.

Looking ahead, there will be a number of speakers from the Bank of England today.

The full economic calendar can be viewed here.

Recommended by Daniel McCarthy

How to Trade EUR/USD

DXY (USD) INDEX TECHNICAL ANALYSIS

The DXY Index has recovered from a seven-month low but remains within a descending trend channel.

Resistance could be at the breakpoint 103.42 or further up and the prior peaks of 105.63, 105.82, 107.20 and 107.99.

On the downside, support may lie at the breakpoint of 101.30 or down at the previous lows of 100.82, 9957 and 99.42.

Chart created in TradingView

— Written by Daniel McCarthy, Strategist for DailyFX.com

Please contact Daniel via @DanMcCathyFX on Twitter

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WTI Price Analysis: Recovery remains elusive below $75.40

WTI picks up bids to snap three-day downtrend at monthly low.
Bearish MACD signals, previous support line challenge buyers.
Upside appears doubtful below 100-DMA, descending trend line from August also challenges the Oil buyers.
Seven-week-old horizontal support limits immediate downside ahead of 2023 bottom.

WTI crude oil licks its wounds near the one-month low, picking up bids to $73.70 during early Monday morning in Europe. In doing so, the black gold bounces off seven-week-old horizontal support to print the first daily gains in four.

However, the bearish MACD signals join the previous support line from early December 2022 to challenge the WTI recovery. Adding strength to the bearish bias could be the metal’s sustained weakness below the 100-DMA.

Hence, the quote’s latest rebound remains doubtful unless it stays below the support-turned-resistance line, close to $75.40 at the latest. Following that, a run-up toward $78.50 can’t be ruled out.

Even so, the 100-DMA and a descending trend line from late August 2022, respectively near $81.00 and $85.00, could challenge the energy bulls before giving them control.

On the contrary, pullback moves may retest the horizontal area comprising multiple levels marked since mid-December, near $73.40.

In a case where the black gold remains bearish past $73.40, its decline to the year 2023 bottom of $70.27 and then to the $70.00 psychological magnet can’t be ruled out.

Overall, WTI remains on the bear’s radar despite the latest corrective pullback.

WTI: Daily chart

Trend: Further downside expected

 

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USD/CHF Price Analysis: Rallies back above 0.9250 reclaim the 20-DMA as bull’s eye the 50-DMA

The US Dollar strengthens across the FX space, a tailwind for the USD/CHF.
USD/CHF Price Analysis: Shifted to neutral biased once buyers hurdle the 20-DMA.

The USD/CHF is surging sharply during  Friday’s North American session, as Wall Street is set to finish the last trading day of the week with losses. Therefore, the USD/CHF is trading at 0.9260, above its opening price by 1.42%.

USD/CHF Price Analysis: Technical outlook

On Friday, the USD/CHF rally broke two downslope resistance trendlines, which would pave the way for further losses. In addition, the 20-day Exponential Moving Average (EMA) at 0.9210 was reclaimed during the uptrend, exposing crucial resistance levels, which, once cleared it, could pave the way for further gains.

The USD/CHF first resistance will be the January 31 daily high at 0.9288. A breach of the latter and the 0.9307, the 50-day EMA is up for grabs., followed by January’s 12 high at 0.9360.

On the flip side, the USD/CHF first support would be the 20-day EMA at 0.9210. Bears reclaiming the latter would exacerbate a fall below 0.9200, followed by the February 3 daily low at 0.9112.

USD/CHF Key Technical Levels

 

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XAUUSD: Elliott wave analysis and forecast for 03.02.2023 – 10.02.2023

2023.02.03 2023.02.03
XAUUSD: Elliott wave analysis and forecast for 03.02.2023 – 10.02.2023logo

Main scenario: consider long positions above the level of 1865.40 with a target of 2000.00 – 2050.00 after correction.

Alternative scenario: breakout and consolidation below the level of 1865.40 will allow the pair to continue declining to the levels of 1818.01 – 1772.93.

Analysis: a descending correction appears to have formed as the fourth wave (4) of larger degree on the daily chart, with wave С of (4) completed inside. H4 chart: apparently, the fifth wave (5) started forming, with the first wave of smaller degree 1 of (5) forming inside. Supposedly, wave iii of 1 finished forming on the H1 chart, and a local correction started unfolding as wave iv of 1. If the presumption is correct, the pair will continue to rise to the levels of 2000.00 – 2050.00 once the correction is over. The level of 1865.40 is critical in this scenario as a breakout will enable the pair to continue declining to the levels of 1818.01 – 1772.93.

Price chart of XAUUSD in real time mode

The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteFinance. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.

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Dow’s Skepticism Anchors Nasdaq Volatility, Dollar Charged by NFPs and Rate Forecasts

Dow, Nasdaq 100, Dollar, USDJPY and Rate Forecasts Talking Points:

The Market Perspective: USDJPY Bullish Above 132.00; EURUSD Bearish Below 108In a week packed with event risk, the strong US NFPs and service sector activity shaped the Fed rate hike interpretation for a distinct Dollar takeWhere the Greenback’s fundamentals seem more direct, the bearings for risk trends as the Dow broods and Nasdaq jumps around are unresolved

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Get Your Free Top Trading Opportunities Forecast

As we look ahead to a new trading week, what is the background mood of the market? An argument can be made by the bulls who point to the general progress made by benchmarks like the Nasdaq 100 over the entirety of this past week – a general push to four-month highs – with justification developed around an impending peak in the major central banks’ tightening cycle and improvement in growth forecasts. Alternatively, bears can draw on the late retreat Friday from the same measures with backing through the erosion of terminal rate discounts. However, these are debate points founded more on belief than tangibility. That means that the ultimate bearing the market takes will be highly contentious and founded more on the collective speculative view and less on scheduled developments.

I long ago resolved myself to the reality that the communal view of the market is what ultimately directs price action. As the saying goes, the ‘market can remain irrational longer than you can solvent’; but the perception of irrationality is itself judgement. That said, there are some underlying aspects to the market that I believe will factor into the overwhelming current of sentiment. The Dow Jones Industrial Average’s refusal to participate in the swell of enthusiasm is remarkable. It wasn’t the only ‘risk’ connected asset not to take part, but the disparity between the Dow (‘value index’) and Nasdaq 100 (‘growth index’) was striking. It perhaps is a result of a resurgence in speculative participation relative to larger market players. The former typically holds a shorter duration and acts on more unconventional reasoning. The latter is more often the foundation for trend development. How can we distinguish market groups? Beyond comparison of close counterparts like Dow-NDX, options activity of retail traders (as a percentage of the entire market) surged to overtake the ‘meme stock’ craze peak this past week.




of clients are net long.




of clients are net short.

Change in

Longs

Shorts

OI

Daily
-9%
0%
-4%

Weekly
4%
-8%
-4%

Chart of Dow Jones Industrial Average and ‘Wicks’, Overlaid with the Nasdaq 100 (Daily)

Chart Created on Tradingview Platform

Looking out over next week’s fundamental docket, there is nothing of prominence that would readily be considered capable of redefining broader risk trends – not like the FOMC decision or NFPs that we had this past week. That means that the winds already to our back will converge with unpredictable headlines and organic speculative trends to form whatever systemic trends we ultimately find. For the current fundamental mix, two major events on Friday seemed to materially change the tone of speculation. After the Federal Reserve’s decision this past Wednesday to hike rates 25 basis points and offer rhetoric to suggest it was still on pace for its projected terminal rate, the market was happy to once again discount the authority’s forecast. That changed, however, when the ISM services report for January was released. The world’s largest economy is heavily dependent on service-based businesses for growth and employment, and the past month’s measure jumped much more sharply than expected – alleviating much of the concern of recession associated to the previous month’s surprise slump (below 50.0). While that can be a boon for growth potential, it is also a capital market burden in supporting the Fed’s drive.

Chart of S&P 500 with US Mfg and Service Activity, Overlaid with Official Recessions (Monthly)

image2.png

Chart Created by John Kicklighter

The prop to Fed forecasts was even more distinctly bolstered by the January labor report. Nonfarm payrolls (NFPs) increased by a net 517,000 which was substantially higher (by 332,000 positions) than the economist consensus. With average hourly earnings growing another 0.3 percent and the jobless rate dropping to a seven decade low, there was a clear divergence in the focus of the central bank’s dual mandate for full employment and stable inflation.

Chart of US Change in Nonfarm Payrolls with Level of ‘Surprise’ Relative to Forecasts (Monthly)

image3.png

Chart Created by John Kicklighter

There were some remarkable moves to come out of this fundamental mix outside of the US indices. In single shares, the top tech stocks which reported earnings after the close Thursday found Google and Amazon sporting serious reversals while top market cap company Apple weathered the storm with a 2.4 percent gain. US 2-year yields charged 19 basis points higher while gold suffered its biggest drop in six months. From the Dollar, there was a notable rally registered across the spectrum as rate forecasts climbed. From a technical perspective, EURUSD through its break of the rising wedge from November and the 20-day moving average. That said, its fundamental backdrop is not as steady. While the Dollar is looking to maintain a yield advantage through their respective terminal rates, the ECB peak is still ambiguous. USDJPY on the other hand is fairly clear with its yield focus on the US side of the equation (though it is an outlier risk the BOJ surprises again like December). What’s more, this pair is also better aligned to risk trends. Looking into next week, it is possible that ‘risk appetite’ is restored but given we are already buoyant on that front with VIX very low, that development would likely be choppy with limited stretch. A spell of fear on the other hand could come swiftly and exact a serious toll. While we often treat the Yen as a ‘haven’; with USDJPY, there is a positive correlation to the VIX.




of clients are net long.




of clients are net short.

Change in

Longs

Shorts

OI

Daily
-26%
10%
-8%

Weekly
-12%
-3%
-7%

Chart of USDJPY with 20-Day SMA and Spot-20SMA Disparity (Daily)

image4.png

Chart Created on Tradingview Platform

While the forthcoming economic docket doesn’t offer much in the way of systemic guidance for the global capital markets, there are nevertheless events for which we should keep track. Monetary policy will likely manifest in more relative consideration rather than a collective perspective (unless sentiment sours). With that said, central bank speak will be a moving target while the Reserve Bank of Australia (RBA) decision will offer the only update from a major player. With AUDUSD dropping, a dovish outlook after an expected hike could exacerbate the rebalance. On the growth / recession side of the conversation, there are secondary indicators galore such as Canadian manufacturing, German industrial production, US economic sentiment and Japanese household spending. Standouts will be Chinese foreign exchange reserves, UK GDP and US consumer sentiment (from the UofM).

Top Global Macro Economic Event Risk for Next Week

image5.png

Calendar Created by John Kicklighter

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US: Despite the rebound, the breadth of services expansion has still slowed – Wells Fargo

The ISM Service PMI released on Friday showed the index rose back above 50, into expansion territory. Analysts at Wells Fargo, point out that after just a single month under 50, the services ISM shot back up into expansion. However, they warn the breadth of services expansion has still slowed.

Key quotes:

“The slowdown in services activity to end last year now looks more like a blip rather than the start of a lasting slowdown in the sector. That’s at least according to the latest ISM services release, which revealed the index advanced 6.0 points to 55.2 after a temporary drop below 50 in December.”

“While we find it easy to talk away some of the weakness in this report, month-to-month movements in the ISM can be volatile and the breadth of expansion has eased.”

“Most components of the ISM improved, with the measure of business activity up 6.9 points to 60.4 and new orders matching that index level leaping 15.2 points after registering contraction in December. New orders now match the highest level registered over the past 12 months, an indication that activity continues to hold up in the services sector.”

“The easing of supply problems is also somewhat benefiting price pressure. At 67.8 the prices paid index remains firmly in expansion, but it has declined the past four consecutive months.”

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Crude Oil Price Under the Pump in the Face of Fed, ECB and BoE Hikes. Lower WTI?

Crude Oil, US Dollar, WTI, Brent, FOMC, Fed, BoE, ECB. OPEC+ China – Talking Points

Crude oil prices have found some support after a tumultuous weekThe Fed, BoE and ECB tightening has raised recession concernsOPEC+ maintain its target while China resurfaces. Where to for WTI?

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Get Your Free Oil Forecast

Crude oil has had a torrid week so far with wider market movements overshadowing the optimism of China re-joining the global economy.

The Federal Reserve, the European Central Bank (ECB) and the Bank of England (BoE) all tightened monetary policy in the last few days. While stocks have broadly rallied, black gold has struggled to find support.

The increasingly restrictive stance from central banks globally has contributed to speculation around the probability of a recession in these major economies.

The market interpreted the Fed as potentially nearing the end of its rate hike cycle despite Fed Chair Jerome Powell specifically saying that he did not see a rate cut this year. Interest rate futures and the swaps market have priced in a cut for November.

While the US Dollar has gained ground in the last 24 hours, it continues to languish against other currencies and gold. The DXY index, a broad measure of the US Dollar against a basket of currencies, remains near a 10-month low.

The lower dollar may assist other countries to increase oil demand as it becomes cheaper in their domestic currency.

Recommended by Daniel McCarthy

How to Trade Oil

Prior to the Fed meeting, data from the Energy Information Administration (EIA) showed inventories increased by 4.1 million barrels last week, well above market estimates.

OPEC+ left production targets unchanged at their gathering this week.

Elsewhere, it is anticipated that Europe will soon introduce further restrictions on Russian refined oil products.

It appears that the outlook for crude is heavily dependent on the smooth transition of China away from its zero-case Covid-19 policy. An increase in demand from the Middle Kingdom might be enough to counterbalance a decrease in consumption in other parts of the world.

WTI CRUDE OIL TECHNICAL ANALYSIS

After making a 12-month low in December, crude oil has rallied to establish higher highs and higher lows in an ascending trend channel.

Yesterday’s sell-off tested the lower trend line support and that move was rejected. That trend line and the low may provide support near 75.00 ahead of the previous lows at 72.46 and 70.08.

The price has moved below all short, medium and long-term Simple Moving Averages (SMA) this week and that bearish momentum could unfold should the trend line be broken.

While most SMAs have rolled over, the 21-day SMA maintains a positive gradient which might suggest that the market is unclear for directional momentum at this stage. Should that 21-day SMA turn negative, it may indicate that bearish momentum could be unimpeded.

On the topside, resistance might be in the 82.48 – 82.72 area where there is a cluster of prior peaks ahead of the December high of 83.34.

Chart created in TradingView

— Written by Daniel McCarthy, Strategist for DailyFX.com

To contact Daniel, use the comments section below or @DanMcCathyFX on Twitter

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