TD Securities: sell euro, buy dollar

TD Securities: sell euro, buy dollar

2021-01-26 • Updated

What happened?

Analysts from TD Securities claimed that "risk sentiment could struggle to find near-term highs just as the global growth backdrop shifts lower, leaving us inclined to hold a sell on rallies posture for the EUR. With this in mind, we implement a short EURUSD position as our Trade of the Week".

The bank sees investor sentiment and the stock market’s performance as key drivers. Indeed, Biden’s stimulus package isn’t likely to be unveiled till mid-March. In combination with the vaccine delays, these issues worsened the sentiment.

Besides, investors express concerns about whether the global stocks are overextended or not. As a result, the backdrop in stock growth increases the demand for the US dollar. Moreover, Fed’s meeting this Wednesday may trigger a pick up in the yields, if the Fed claims to withdraw stimulus earlier than expected. Rising yields will underpin the USD.

Forecast

TD Securities expects EUR/USD will reach 1.2050 by the end of January.

Technical tips

On the daily chart, EUR/USD is supported by the 50-day moving average at 1.2100, which the pair has failed to cross several times. However, we shouldn’t rule out that the euro may drop below this level amid the current strong fundamentals. Therefore, the breakout of 1.2100 will drive the pair to the low of January 18 and the lower line of Bollinger Bands at 1.2050. The MACD indicator is moving back and forth near the zero line. When the MACD gets below 0 to turn negative, it can be used to confirm a downtrend. Resistance levels are at the recent highs of 1.2200 and 1.2260.

EURUSDDaily.png

TRADE NOW

Similar

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.

Oil Market Outlook
Oil Market Outlook

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.

Latest news

Gold is Rising Despite Inflation Returns
Gold is Rising Despite Inflation Returns

Gold prices are rising for three consecutive days ahead of the Federal Reserve (Fed) interest rate decision, which is expected to remain unchanged due to declining inflation and a positive economic outlook. Investors are keen on the Fed's interest rate guidance, fearing a hawkish stance that could trigger market risk aversion.

Can the Chinese Economy Recover?
Can the Chinese Economy Recover?

Amid concerns of a Chinese economic slowdown, reports of declining investment often overlook China's efficient investment strategy in emerging sectors for long-term growth. China has taken measures to stabilize foreign and private sector investments, like reducing the reserve requirement ratio to boost investor confidence.

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