EUR/USD: bearish prospects

EUR/USD: bearish prospects

2020-08-04 • Updated

Some analysts believe the euro will lose its gains in the third quarter. What are the reasons?

Indeed, EUR/USD has shown the best performance for almost a decade. It managed to surge from 1.1200 to 1.1900 during July. However, economists from Danske Bank foresee the pair to retest 1.1200 again.

Why did EUR/USD rise?

Firstly, the better-than-expected EU data drove the euro upward during the previous month. In addition, the 750-billion-euro EU recovery fund improved the market sentiment and boosted the EUR too. Moreover, EUR/USD kept rallying because of the weak US dollar. Main reasons for the low demand for the greenback were rising coronavirus cases in the country and low interest rates. Also, dovish statements from the Fed and disputes over the fiscal stimulus added headwinds to the USD.

Long-term forecasts

Analysts from the ATFX have even worse forecasts than Danske Bank. They said that EUR/USD is going to slump in the third quarter to 1.0990. In fact, US new infections have started to decline. It basically means that the economic activity will soon recover in the USA. Moreover, today the US ISM Manufacturing PMI turned out better than expected. It was 54.2, while the forecast was 53.6. It should push the pair down.

Technical tips

EUR/USD has just bounced back from the key support at 1.1700. If it breaks through the 61.8% Fibonacci level at 1.1820, it will open doors towards the key psychological mark at 1.1900. However, the relative strength index indicates that the EUR/USD’s rally is overdone. If it falls below the support at 1.1740, it will clear the way towards the yesterday low at 1.1700 and then to the 50.0% Fibonacci level at 1.1600.




Oil: Russia-Ukraine Crisis Could Boost Oil Prices
Oil: Russia-Ukraine Crisis Could Boost Oil Prices

Crude oil futures surged on Monday due to disruptions in Russian refining capacity caused by Ukrainian drone strikes and Moscow's decision to cut output to comply with OPEC+ targets. The West Texas Intermediate (WTI) contract for May settled at $81.95 a barrel, up $1.32, while the Brent contract for May settled at $86.57 a barrel, also up $1.32. Russia instructed...

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...

Latest news

USD: Powell Speaks on Cutting Interest Rates
USD: Powell Speaks on Cutting Interest Rates

Jerome H. Powell, the Federal Reserve chair, stated that the central bank can afford to be patient in deciding when to cut interest rates, citing easing inflation and stable economic growth. Powell emphasized the Fed's independence from political influences, particularly relevant as the election season nears. The Fed had raised interest rates to 5.3 ...

WTT: Currency Pairs To Trade In April
WTT: Currency Pairs To Trade In April

Hello again my friends, it’s time for another episode of “What to Trade,” this time, for the month of April. As usual, I present to you some of my most anticipated trade ideas for the month of April, according to my technical analysis style. I therefore encourage you to do your due diligence, as always, and manage your risks appropriately.

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.


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