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

OPEC Boosts The Oil Market
OPEC Boosts The Oil Market

Brent crude futures is maintaining stability this Friday, with traders awaiting an OPEC+ meeting that might lead to further supply cuts. Brent crude was down 8 cents at $81.34 a barrel, following a 0.7% drop in the previous session.

How Will China’s Regulation Affect Oil?
How Will China’s Regulation Affect Oil?

China has issued new oil product export quotas to allow oil companies to send surplus barrels overseas, particularly Sinopec, which has the highest volume among quota holders. While the exact quota volume remains undisclosed, oil companies are forecasted to export approximately 3.5 million metric tons of clean oil products in September, a 10% increase from August.

The Oil Market in the Month of June
The Oil Market in the Month of June

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.

Latest news

Bitcoin 2024: The Story Is Cyclical
Bitcoin 2024: The Story Is Cyclical

In the dynamic world of financial trading, understanding the nuanced relationship between the Federal Reserve's key interest rates and Bitcoin can be a game-changer…

Will NFP Be Positive for the US Dollar?
Will NFP Be Positive for the US Dollar?

As the US Non-Farm Payrolls (NFP) take center stage, this month's data gains special attention, particularly after the unemployment rate took a concerning turn in the previous month. The US ADP Employment Change reveals a significant decline, with the economy adding 298K new jobs...

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