ONLINE FOREX BROKER
2021-01-26 • Updated
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.
TD Securities expects EUR/USD will reach 1.2050 by the end of January.
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.
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.
The past two years have seen the biggest swings in oil prices in 14 years, which have baffled markets, investors, and traders due to geopolitical tensions and the shift towards clean energy.
The oil prices rally and world central banks’ dovish monetary policy caused by the Covid-19 pandemic were the main reasons for current inflation growth…
A comparative examination of the strength of the US-Dollar often gives tangible insight into the direction of Gold (XAUUSD). The chart above indicates the expectation of a bullish price reaction from the demand zone
The US Dollar has been remarkably sluggish for the past few weeks despite being within a distinct Demand zone. My expectation of a springing rebound off the demand zone has not exactly played out yet, however, the zone remains unbroken.
For those who may be unfamiliar with Price Action trading, the horizontal arrows represent areas where the market structure was broken. As you can see in the scenario above, price broke below the previous low at the two marked instances
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