EUR/USD: Strong support seen at the 1.2000 zone – Standard Chartered
|Economists at Standard Chartered expect the US dollar to continue moving downward in the year ahead. Nonetheless, the EUR/USD pair is set to see dips but should hold above the 1.2000 level.
See: US dollar to experience further weakness in the year ahead – MUFG
Key quotes
“We expect USD to move lower through 2021, but also expect short-term rebounds along the way.”
“We see EUR/USD long positions being, by far, the most elevated and significant for broad USD. In that context, additional drivers of a near-term decline are likely to be a recent rise in US Treasury yields, a steeper US yield curve and a widening yield differential. The large fiscal stimulus planned by the incoming Biden administration could potentially boost short-term US sentiment and economic outperformance.”
“There may also be trouble brewing in Italian politics that could lead to a snap election. With elections also due in the Netherlands (in March) and Germany (by October), the recent closer regional collaboration could soon be tested by populist politics.”
“We expect robust supports around 1.2060 and 1.2000. A mild USD rally could end there. A break lower would suggest a deeper decline into 1.1600-1.1900 window.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.