Logo

Posts

EURUSD forecast for 24.06.2020

June 24, 2020

June 24, 2020

Dollar is conducting an investigationDmitri Demidenko

Traders, like detectives, must ask a question about who benefits

In 2018-2019, when the US dollar was growing steadily, and Donald Trump was talking about the drawbacks of a strong local currency, investors were discussing the possibility of joint intervention by the Fed and the US Treasury to hold the USD bulls back. They estimated the resources that Steven Mnuchin and his colleagues can afford, they projected the levels where they should start selling the greenback. The pandemic has proved that things are much simpler. Low Treasury rates and steadily rising US stock indexes are the major growth drivers for the [EUR/USD][1]. The euro-area positive PMI data are just another reason to sell the US dollar.

Traders, like detectives, must ask a question about who benefits. The rise of the Misery index, including both unemployment and inflation, to its all-time highs is posing a significant threat to President Donald Trump’s re-election in November. Historically, such increases have correlated with a loss for the incumbent party in the White House, and right now, the signals have never been more positive for the challenger. Donald Trump urgently needs strong stock indices, to prove that the US economy is strong. That is why he insists that the US-China trade deal is intact and COVID-19 should go away after a while, although it would be good to have a vaccine.

Dynamics of Misery Index

![LiteForex: EURUSD forecast for 24.06.2020][2]

Source: Bloomberg

The Fed is not going to oppose the US president. The US central bank, like the White House, needs a strong economy. Jerome Powell and his fellow central-bankers are concerned about the rise of the personal savings rate in the U.S. They need low interest rates to encourage Americans to take their money away from banks and spend, thereby supporting the rebound of the US GDP.

Dynamics of US personal savings rate

![LiteForex: EURUSD forecast for 24.06.2020][3]

Source: Bloomberg

So, investors, who buy the greenback now, have to go against both the Fed and the White House, which is extremely risky. The decision on whether to hold the USD in portfolios in the same volume or not has been taken. There is another question now, what to buy? Does it make sense to buy the euro? Yes, there are disputes in the euro area: between the “Frugal Four” and other EU members on the emergency recovery fund, and between the ECB and Germany’s constitutional court on the QE, between the UK and the EU on Brexit. However, everybody is confident that everything will end up well. Furthermore, the euro-area strong PMI data in June bring back the idea of the V-shaped recovery of the euro-area economy.

Dynamics of euro-area PMI

![LiteForex: EURUSD forecast for 24.06.2020][4]

Source: Bloomberg

Investors do not worry that the PMI is still below the critical level of 50, and the economy will hardly return to the pre-crisis levels before 2022. Markets bet on the improvement of the epidemiological situation in Europe, which, like China, should restore economic growth faster than the USA. The only threat to this scenario could be posed by trade wars. If there are no shocks, the [EUR/USD][1] can well meet my [forecast made in December][5] and rise to 1.14 in late June and 1.16 in late December.

P.S. Did you like my article? Share it in social networks: it will be the best “thank you” :)

Ask me questions and comment below. I’ll be glad to answer your questions and give necessary explanations.

Useful links:

  • I recommend trying to trade with a reliable broker [here][6]. The system allows you to trade by yourself or copy successful traders from all across the globe.
  • Use my promo-code BLOG for getting deposit bonus 50% on LiteForex platform. Just enter this code in the appropriate field while [depositing][7] your trading account.
  • Telegram channel with high-quality analytics, Forex reviews, training articles, and other useful things for traders

Price chart of EURUSD in real time mode

![Dollar is conducting an investigation][8]

The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.

Rate this article:

{{value}}

( {{count}} {{title}} )

  1. my.liteforex.com/trading/chart?symbol=EURUSD&returnUrl=true
  2. cdn.liteforex.com/cache/uploads/blog_post/eurusd/misety-usa-24-06-20.jpg?w=30&s=bdef2d46367e1404f1ceb0b6ceec10f6
  3. cdn.liteforex.com/cache/uploads/blog_post/eurusd/savings-usa-24-06-20.jpg?w=30&s=055b0ebdb833d287a38b5b3b33fd79f0
  4. cdn.liteforex.com/cache/uploads/blog_post/eurusd/recovery-pmi-24-06-20.jpg?w=30&s=030da6dae1fc4ac2d8b912673f9d0a86
  5. www.liteforex.com/blog/analysts-opinions/forex—2020-forecasts-and-outlook/
  6. my.liteforex.com/?category=analysts-opinions&slug=dollar-is-conducting-an-investigation&openPopup=%2Fregistration%2Fpopup&utm_source=blog&utm_medium=article&utm_campaign=bonus
  7. my.liteforex.com/deposit/?category=analysts-opinions&slug=dollar-is-conducting-an-investigation&promo_code=BLOG&utm_source=blog&utm_medium=article&utm_campaign=bonus
  8. cdn.liteforex.com/cache/uploads/blog_post/eurusd/liteforex-blog-eurusd-24-06-20.jpg?q=75&w=1000&s=4403af409b51da87ad28b832830f57db