ONLINE FOREX BROKER
2020-12-15 • Updated
Strategists at Crédit Agricole expect the USD will continue falling, while the EUR will keep rising in the coming months. The bank named the greenback as the largest loser from the global recovery. Indeed, the US dollar has been dipping for almost half a year already. As a result, EUR/USD has broken through the key psychological level of 1.2000. It’s a natural thing that investors take out their capital from safe-havens assets such as the USD and flow them into assets with higher returns as the global economy is entering the new growth phase.
Crédit Agricole considers that the greenback is overvalued against its major peers as the USA has fiscal and trade deficit. “Global investors could thus start hedging against future depreciation of the currency and sell the USD forward”. At the same time, Crédit Agricole models demonstrate that the euro is undervalued.
According to Crédit Agricole, "recovering global growth and trade will lead to increased selling of USD by global corporates as they convert their growing exports proceeds into their home currencies”. They foresee EUR/USD to reach 1.2500.
EUR/USD is touching the 50-period moving average, which has been supporting the pair since the start of November. Therefore, the price is unlikely to break down, but if it does, the support zone of the recent lows of 1.2100-1.2110 will limit the further falling. When EUR/USD approaches the resistance of 1.2170, it may meet the fresh selloff ahead of the breakout. The next resistance will be at 1.2200.
Oil prices rebounded slightly on Friday but are still expected to show losses for the week due to concerns about slowing growth in the US and China. US crude futures rose 2.7% to $70.41 per barrel, while the Brent contract increased by 2.5% to $74.33 per barrel.
China's economy is rocketing. On the other hand OPEC+ countries take the decision to cut the production. What will be the impact on the oil price?
The EU plans to intervene in markets directly to curb rising energy costs, threatening to push the Euro area's economy into a deep recession.
Let's dive into the latest developments shaping the global economic landscape. Good news first: the threat of an unprecedented US debt crisis has receded, as US lawmakers passed a bill to raise the debt ceiling and avoid a catastrophic default. Phew! But don't pop the champagne just yet, because storm clouds are still looming. High inflation, rising interest rates, and sluggish growth are challenges that have yet to disappear.
Thanks to the incredible advancements in horizontal drilling and fracking technology, the United States has experienced a mind-blowing shale revolution. They've become the heavyweight champion of crude oil production, leaving Saudi Arabia and Russia in the dust. They even turned the tables and became net exporters of refined petroleum products in 2011.
Let's dive into the world of gold. Currently, the price of gold, represented by XAUUSD, is stuck in indecision, hovering around the $1,975 mark. The market is anxiously awaiting two important factors: the release of the Federal Reserve's meeting minutes and the extension of the US debt ceiling.
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