EUR/USD Review : The Beginning of 2021 and EUR/USD

Vantagepointx

VantagepPointX Representative
Messages
5
The beginning of 2021 has seen a positive state of EUR/USD. The price of the pair has already crossed the 1.20 trading level. The current state hints that EUR/USD will further gain ground in the coming days. If the present pace of trading continues then the pair will likely reach the 1.25 level.

ECB & EURO/USD:​

The first quarter, particularly the beginning of 2021 is likely to witness further ease in the monetary policy. European Central Bank seems to further relax the policy to deal with the effects of the COVID19. Previously when ECB relaxed the policy, it has negatively affected the price of EURO. EURO suffered a significant fall in its value due to this step of ECB. In fact, it has dragged EURO down against its counter-currencies. Particularly EURO has reached the lowest value against Dollar in EUR/USD. ECB has played a vital role in keeping the value of EUR/USD below the 1.20 trading point. But the situation does not remain static in the beginning of 2021. The changing circumstances of Forex market is undoubtedly its greatest charm.

Changing scenario of 2021 to support EURO:​

The last couple of months have seen a fall of EURO. But now the situation is changing. January 2021 seems to support EURO. The current scenario suggests that the upcoming ease and relaxation in the Eurozone policy will not negatively influence EURO. It seems as ECB will not be able to keep EURO at low value anymore. As there will be no interference and influence of ECB, thus you can expect a strengthening EURO in the near term.


Falling USD to support EURO:​

In addition, the weakening state of US dollar will also support EURO as well. As safe-haven Dollar is already losing ground. Apparently USD has temporarily lost its charm due to several economic factors. The vaccine seems to overcome the COVID19. The defeat of the virus has weakened USD. It is one of the major factor that contributed in the fall of USD. It is beneficial factor to support EURO in Forex market. But if the 3rd wave of the brutal virus plays havoc with lives of people then it will again result in the rise of USD which will drag EUR towards fall. Then you can witness a pullback. But right now it is not happening any soon. So in January 2021, enjoy a stronger EURO for the time being and see how different factors support EURO.
 

ScottHughes

Corporal
Messages
112
Absolutely. Dollar dropping and can't see it recovering to rally anytime soon while Corona is around. Pretty sure USD will need be hoping for a BTC sell off in usd pots but I'm expecting crypto money to go into the alts
 

RahmanSL

Major
Messages
2,718
"It seems as ECB will not be able to keep EURO at low value anymore."

Yes, indeed, eventually the ECB will run out of excuses to keep the Euro interest rates at present levels. Continued uncertainty over the path of the virus along with elevated unemployment and weak inflation are the main reasons for waiting.
But when the ECB will actually raise rates is a billion pips question.

For now, and until after the inauguration of soon-to-be President & VP Biden & Kamala and the unveiling of their economic plans, it's near impossible to predict the trajectory of US$.

As someone pointed out somewhere, January is where the EUR/US$ tends to make huge upward moves and, Jan 2021, might be no different.
 
Top