2020-09-04 • Updated
Some analysts believe that there is more room for the US dollar to fall further. According to AG Bisset Associates, the USD will plummet by 36% against the euro. It’s hard to believe right now amid the stronger greenback, but let’s discuss why it’s possible.
Wall Street analysts have bearish forecasts for the US dollar as well. The greenback is traded at its lowest levels in almost two years with Goldman Sachs, UBS, and Societe Generale among the banks predicting more losses.
According to Goldman Sachs, the US dollar will dip down amid the low-interest rates and recovering global economy. Indeed, the recent Fed’s dovish statement will weigh further on the US dollar.
Indeed, getting the USD right is crucial for investors. First of all, it’s the most traded currency on the Forex market. Secondly, its’ price dynamic impacts corporate earnings as well as gold and oil prices. According to Goldman Sachs and TD Securities, all the conditions are pointing to the further dollar weakness: Fed’s decision to leave low rates for longer and the solid global economic recovery.
Nevertheless, other analysts consider that the optimistic US economic releases and risk-averse mood may underpin the US dollar. Actually, the world’s close dependence from the dollar should stop it from the total crash, but it still stays vulnerable to the upcoming US presidential re-elections and Sino-American tensions.
The NFP report came out better than analysts expected, which drove the USD upward. However, analysts believe the greenback will keep rallying just in the short term, while there are some obstacles in the long run. Actually, there is information that “out of 1.371 million jobs, only 1.027 million were private-sector positions, below expectations. Looking at government jobs, no fewer than 238,000 are temporary census workers – who are scheduled to be laid off at the end of September. That is the first reality check.” Besides, the coronavirus restrictions have made counting people more complicated. According to the Bureau of Labor Statistics estimates that without these problems, the unemployment rate would be around 9.1%. Moreover, the optimistic NFP report may prolong fiscal stimulus talks for longer, which, in turn, may weigh on stocks.
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...
Bearish scenario: Sales below 80.00 with TP1: 79.60... Anticipated bullish scenario: Intraday purchases above 80.70 with TP: 81.50...
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...
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 ...
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.
Bearish scenario: Sell below 1.0820 / 1.0841... Bullish scenario: Buy above 1.0827...
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Don’t waste your time – keep track of how NFP affects the US dollar and profit!
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