What to expect from the major currency pairs in the New Year.
Without a doubt, the vast majority of brokerage firms and private traders consider EUR / USD pair as one of the main tools for their work. Other sources say that the couple takes 22% to 32% of the Forex market. Followed by USD / JPY, GBP / USD, AUD / USD, USD / CHF, USD / CAD, EUR / JPY and EUR / GBP.
All of these currencies, primarily the dollar and the euro, in varying degrees, are correlated with macroeconomic fundamentals and political events, which is a disadvantage from the point of view of technical analysis and the fans, on the contrary, the advantage according to the apologists of fundamental analysis. In the first case, only one post on Twitter President of the United States the most powerful punches areas of support / resistance, turns back the channels and trends, crazy lights and turns in a fine spray of Elliott waves. In the second macro-economic statistics allows without breaking their heads over the graphic shapes and candlestick analysis, to give fairly accurate long-term forecasts. For example, over the next 12 months.
So, what, according to experts, is waiting for us in the coming year?
Analysts at Deutsche Bank, Goldman Sachs, Bank of New York Mellon and a number of other banks have reached a consensus, predicting the fall of the US dollar in 2020. The main reason for this is the slowdown in global economic growth, which will increase the demand for riskier assets. Especially because the US Federal Reserve, on the eve of presidential elections, under the pressure of Donald Trump, with high probability, will continue to cut interest rates, or at least keep them at current levels.
«Financial Times» wrote that, according to Citigroup experts, policy of quantitative easing (QE), the Fed pursued and pumping cheap dollar liquidity of the market can be a catalyst for the dollar's decline. Together with colleagues from Citigroup and analysts of the Swiss bank Lombard Odier, and one of the largest investment companies in the world, BlackRock, who are expecting a moderate decline of the dollar in the next six months.
JPMorgan Chase experts at the end of 2020. forecast for the pair EUR / USD rate of 1.14. At Goldman Sachs and Bank of America Merrill Lynch called 1.15. And in the German Deutsche Bank and the French Societe Generale forecasts the dollar even more gloomy - there believe that next year the euro will trade at $ 1.20.
As estimated Bloomberg, the consensus forecast of the largest operators of the market suggests that at the end of 2020 the US dollar, "lose weight" for another 400-500 points, and the EUR / USD will rise in the area of 1.16.
Proponents of conspiracy theories, of course, suspected market manipulation and conspiracy that bankers want to buy dollar liquidity at the lowest possible prices, which are spreading and "bearish" forecasts. And here it is appropriate to recall the words of Andreas König (Andreas Koenig), the head of Global FX at Amundi Asset Management transnational investment company, that many times he had heard about the fall of the dollar against the euro, and every time it happened the other way around. "I would be very surprised if this consensus is achieved", - he said.
"Indeed, the Fed interest rate of 1.75% is small, - says a leading analyst of the brokerage company NordFX John Gordon (John Gordon), - but other controls it is actually equal to zero or negative. Despite the decline in rates, trade wars and other problems, since February 2018, the dollar rose against the euro by more than 10%. And if you look at the results of last year, it is clear that for many investors, because of the weakness of the European economy and problems with Brexit, namely the dollar has become a safe haven. A central bank, he is still the main reserve currency, far ahead of any other assets. "
As for the other currencies, Goldman Sachs predicts that the exchange rate of the British pound against the dollar by the end of 2020. reach $ 1.37.
The Bank of America Merrill Lynch also believes that not only the euro, but, first of all, the pound should benefit from the resolution of uncertainty with Brexit, resulting in the pair GBP / USD rises to the horizon 1.39. The falling dollar will also support the emerging markets and by strengthening currencies of the countries belonging to the Association of Southeast Asian Nations (ASEAN), and quotes the USD / JPY will fall to 103 yen per dollar.
Will continue to attract the interest of the Canadian and New Zealand dollars, will go up and the price of gold.
Leap 2020 - is 12 months, 366 days, and these days it can happen very much, which is able to refute any forecasts. The dollar exchange rate will depend on the domestic situation in the US, and from what is happening in global markets, not only in America but also in Europe and Asia. "I think that a full-scale US deal with China will change the rules of the game ... This changes everything!" - predicts David Bloom (David Bloom), a global strategist of FX of HSBC .
Change it? Wait for an answer to this question is very long. In the meantime:
patience, luck and fulfillment of the most cherished dreams!
Happy New 2020 Year!
Disclaimer: This material is not a recommendation to invest or guidance on working in the financial markets and are purely exploratory in nature. Trading on the financial markets is risky and can lead to complete loss of funds contributed.
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