Major banks predict stronger USD and weaker EUR

Major banks predict stronger USD and weaker EUR

2022-08-30 • Updated

What happened?

EUR/USD dropped, driven by rising US bond yields. From the technical point of view, the pair should pull back to the upside from the current levels. However, some analysts believe the recent drop of EUR/USD is the beginning of a further downtrend. Why? 

  • The yield paid on US bonds keeps rising, especially in recent days, as people worry that their investments will be eaten away by higher inflation in the future. If the current tendency continues, EUR/USD will keep falling over the coming weeks.
  • Eurozone’s slow vaccine rollout hit the EU's economic recovery and pushed the euro down. 

Banks’ forecasts 

Crédit Agricole: "We believe that the improving US outlook, coupled with more persistent inflation overshoot could result in higher UST yields and a stronger USD in coming months”.

Saxo Bank: "Real US yields have risen and a continuation of the spike could support the greenback and push EUR/USD over the edge of 1.2000 and thus into the old range down toward 1.1600".

Technical tips

EUR/USD has been moving in an ascending channel since mid-summer. Since it has approached the lower trendline at 1.2030, we can expect the pair to bounce off rather than break out. If it manages to break above the resistance of 1.2100, the way up to the 50-day moving average of 1.2150 will be open. In the opposite scenario, if the pair breaks below the lower trendline at 1.2030, the way down to the low of February 4 at 1.1950 will be open. 

EURUSDDaily.png

 

TRADE NOW

Similar

WTI and Brent React To a Key Pivot
WTI and Brent React To a Key Pivot

Brent oil is currently on a bullish trend, facing resistance near $84 and supported by the 200-day EMA. Breaking above this level could lead to a climb towards $90. Short-term support is observed around $80, backed by the 50-day EMA. As summer approaches and travel increases, crude oil tends to benefit from seasonal patterns. Despite temporary setbacks, buying...

Oil In The Geopolitical Lens: Soars And Dips Under The Influence Of Global Events
Oil In The Geopolitical Lens: Soars And Dips Under The Influence Of Global Events

Amid uncertainty driven by geopolitical events, oil prices surged to record highs. However, a correction in oil prices is observed with a gradual improvement in the situation in the Middle East and an increase in demand. The question facing investors is whether there are prerequisites for further price growth or if everything depends on the dynamics of the political landscape. In this article, we will explore the impact of recent events on the global oil market and the prospects for developing this crucial commodity sector.

Latest news

USD Expected To Recover Some Strength
USD Expected To Recover Some Strength

In the early hours of Tuesday, the US Dollar faces challenges in maintaining its strength against major currencies, with the US Dollar Index struggling to surpass the 104.00 mark. Investors are eagerly anticipating the release of key economic data, including January Durable Goods Orders and the Conference Board's Consumer Confidence Index for February. Additionally, the economic calendar includes reports...

CAD: Price Delivery Suggests Strength
CAD: Price Delivery Suggests Strength

In the early hours of Tuesday, the US Dollar faces challenges in maintaining its strength against major currencies, with the US Dollar Index struggling to surpass the 104.00 mark. Investors are eagerly anticipating the release of key economic data, including January Durable Goods Orders and the Conference Board's Consumer Confidence Index for February. Additionally, the economic calendar includes...

Deposit with your local payment systems

Data collection notice

FBS maintains a record of your data to run this website. By pressing the “Accept” button, you agree to our Privacy policy.

Callback

A manager will call you shortly.

Change number

Your request is accepted.

A manager will call you shortly.

Next callback request for this phone number
will be available in

If you have an urgent issue please contact us via
Live chat

Internal error. Please try again later

Don’t waste your time – keep track of how NFP affects the US dollar and profit!

You are using an older version of your browser.

Update it to the latest version or try another one for a safer, more comfortable and productive trading experience.

Safari Chrome Firefox Opera