Euro 1Q 2021 Forecast: Can the ECB Curb the Euro s Strength?
EUR price outlook for 1Q 2021
The ECB seems to have run out of ammunition in its battle to keep EUR/USD below the 1.20 level.
The clear break above 1.20 in December suggests the ECB is now unable to curb the Euro’s strength and that further gains are likely in the weeks ahead. Advertisement
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Euro Price Gains Likely in 1Q
The European Central Bank has made clear that it does not want to see EUR/USD above the 1.20 mark, once seen as its “line in the sand” for the pair, because of the negative impact of a strong Euro on both the Eurozone’s competitive trade position and its inflation rate. Yet it is hard to see what it can actually do about it now the pair is above that level, and that suggests further strength in EUR/USD in the weeks ahead.
US Dollar 1Q 2021 Forecast: Safe Haven Status Versus Fading Growth Position 2020-12-18 19:00:00 John Kicklighter, Chief Strategist
US Dollar Fundamental Forecast Talking Points:
Through the final quarter of the 2020 (up until December 18th), the Dollar dropped against the majors between 7.5% in NZDUSD and 2.2% with USDJPY
Prominent themes like the Covid-19 spread and vaccine as well as stimulus debates have weighed the Dollar but older matters like trade are likely to also return
Ultimately, the state of risk appetite is the top qualifier for USD direction and intensity with the Greenback’s safe haven status ready to go to work
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Euro Technical Forecast 1Q 2021: EUR/USD Pullback After Breakout? 2020-12-18 22:00:00 Ilya Spivak, Head Strategist, APAC
EUR/USD TECHNICAL FORECAST – Q1, 2021
Euro looks to have broken a 12-year downtrend vs. the US Dollar
Challenge of key long-term resistance may prompt a retracement
Weekly RSI divergence warns upside momentum may be ebbing Advertisement
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The Euro appears to have marked a pivotal break upward against the US Dollar with a breach of trend resistance guiding prices lower for over 12 years. A pullback may follow before any upside follow-through materializes however.