Recently, the American currency has been trying to determine its direction. “American”
faces a choice: try to climb to new peaks or try to gain a foothold in current positions so as not to be
in a financial hole.
For several days, the greenback tried to stay within the existing price range,
however, the collapse was inevitable. The pull of the downtrend won out and the USD surrendered most of its positions.
On Monday, April 19, the greenback slipped to 1.5-month lows amid collapsing US government debt yields. Tuesday,
On April 20, this trend continued. Even the strong data on the American economy could not keep the “American”.
The USD rally recorded earlier this year was supported by massive placements
American government bonds. This was facilitated by the adoption of a stimulus package worth $ 1.9 trillion. However, now this “support” has lost
relevance, and the dollar began a downward movement. At the same time, the yield on 10-year US government bonds fell last week
up to 1.5280% from more than an annual high of 1.7760%. This sharply reduced the attractiveness of the American currency, the agency notes.
The strengthening of the USD, recorded from January to March 2021, is considered by experts to be a manifestation of an upward
correction within the bearish trend. The situation has changed since April this year, and the greenback is under sustained pressure,
threatening to develop into a long-term negative trend. However, economists are counting on the normalization of the external background and dynamics
On Monday, April 19, the EUR / USD pair surpassed the psychologically important level of 1.2000. According to analysts,
this paved the way for the tandem to record 1.2350. Tuesday morning, April 20, couple EUR/USD simultaneously reached a maximum near 1.2047, increasing
on the figure. According to the calculations of specialists, the tandem is in a state of correction, which varies from 50% to 61.8%. To the present
moment of steam EUR/USD was near 1.2050, trying to gain a foothold at current levels.
Euro forecasts: overviews of the nearest dynamics of EUR
Ahead of the ECB meeting scheduled for Thursday, April 22, the euro exchange rate for the first time since
March rose above 1.2000. Against this background, the optimism of experts of the largest investment bank Goldman Sachs has grown. The bank believes that the European
the economy will recover at a rapid pace, the single currency will strengthen, and the dollar will continue to fall in price. Bank experts recommend
investors to open long positions in EUR, that is, to buy the European currency, taking advantage of the decline in USD. Goldman specialists
Sachs has improved its estimate of the euro against the dollar for the next three months to 1.2500, while maintaining its 12-month forecast of
the level of 1.2800. At the same time, the bank raised its estimate of the growth of European shares for the Stoxx 600 index. Analysts expect that in the next
12 months, the total yield on securities in the EU will be 10%.
Specialists from large companies such as Global FX, Rates and EM Strategy also recommend buying euros with
with a target price of 1.2500 and a stop order of $ 1.175. At the same time, economists warn investors against excessive optimism, recalling that
during the period of massive lockdowns, the European economy is very vulnerable. In such a situation, one should not expect a quick rise in the EUR. In this
the moment Europe lags far behind the United States in terms of the pace of economic development, while on the territory of the eurozone is in full swing
a printing press launched by the ECB. In this case, fixing the EUR / USD pair above 1.2000 is impossible, experts are sure.
JPMorgan bank experts are also skeptical about the strengthening of the euro. Analysts are confident that weakness
greenback is a temporary phenomenon, supported by the exceptional position of the American economy. Bank experts
keep USD long against EUR, while assuming EUR / USD may approach 1.3000.
On the dollar, analysts’ forecasts look like a swing, leaning from the relatively positive
to deeply pessimistic. At the moment, the greenback sank not only against the euro, but also against a wide range of currencies and assets.
Experts note that the collapse of the USD coincided with the fall in long-term yields on US government bonds. Some analysts are confident
that the dollar will benefit from a US Treasury asset placement scheduled for this week. USD growth is possible
also after the ECB meeting. The specialists admit that the EUR / USD pair will return to 1.1800, since they believe in the strength of the “American”.