FUNDAMENTAL EURO FORECAST: BEARISH
The EU looks to be struggling to vaccinate its people against Covid-19, raising fears of another lockdown.
Moreover, the yield advantage of US Treasuries over German Bunds continues to rise.
Neither of these factors seems to have been fully priced in yet to the EUR/USD pair so a break to the downside is possible once the current period of consolidation ends.
EURUSD has traded for the past couple of weeks between resistance at the 1.20 round number and rising support that can be seen on the chart below. This could well be a continuation pattern suggesting the price will break to the downside and continue the previous falls from the February 25 high at 1.2243.
From a fundamental perspective this would be no surprise given that the EU seems to be behind countries like the US and the UK in vaccinating its people against the coronavirus. That’s caused fears of another lockdown that would damage the prospects of an economic recovery from the slump caused by the Covid-19 pandemic.
This all suggests that EUR/USD could well drop in due course towards the lows around 1.16 last seen in November 2020. However, the counter argument is that both the slow vaccination program and the yield differential are already in the price and that this, alongside a dovish Federal Reserve, will weaken the US Dollar. In that case, a sustained break above 1.20 could lead to a rally back to the highs around 1.2340 reached in early January.
We are looking for short on this pair guys keep and eye out on (EUR/USD)
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The EU looks to be struggling to vaccinate its people against Covid-19, raising fears of another lockdown.
Moreover, the yield advantage of US Treasuries over German Bunds continues to rise.
Neither of these factors seems to have been fully priced in yet to the EUR/USD pair so a break to the downside is possible once the current period of consolidation ends.
EURUSD has traded for the past couple of weeks between resistance at the 1.20 round number and rising support that can be seen on the chart below. This could well be a continuation pattern suggesting the price will break to the downside and continue the previous falls from the February 25 high at 1.2243.
From a fundamental perspective this would be no surprise given that the EU seems to be behind countries like the US and the UK in vaccinating its people against the coronavirus. That’s caused fears of another lockdown that would damage the prospects of an economic recovery from the slump caused by the Covid-19 pandemic.
This all suggests that EUR/USD could well drop in due course towards the lows around 1.16 last seen in November 2020. However, the counter argument is that both the slow vaccination program and the yield differential are already in the price and that this, alongside a dovish Federal Reserve, will weaken the US Dollar. In that case, a sustained break above 1.20 could lead to a rally back to the highs around 1.2340 reached in early January.
We are looking for short on this pair guys keep and eye out on (EUR/USD)
If you find this helpful and want more FREE Updates on TradingView
. . . . . Please show your support back,
. . . . . . . . Hit the 👍 LIKE button,
. . . . . . . . . . . Drop some feedback below in the comment!
❤️ Your Support is very much 🙏 appreciated! ❤️
💎 Want us to help you become a better Forex trader?
Now, It's your turn!
Be sure to leave a comment let us know how do you see this opportunity and forecast.
Trade well, ❤️
1_GFX English Support Team ❤️