Logo

Posts

US dollar price forecast September 23 2020

2020-09-23

2020-09-23

Dollar is shooting euro. Forecast for 23.09.2020Dmitri Demidenko

The [EURUSD][1] pair has broken out level 1.17. Will the price fall deeper? I will try to find and out and offer a trading plan for the next few weeks.

Fundamental US dollar forecast for today

The Forex market is changing all the time; no trend can last infinitely. In summer, the [EURUSD][1] bulls were strong as the epidemiological situation in the euro-area was better than that of the USA. Investors expected European GDP to recover faster than US growth. The optimism grew because the Fed was willing to hold the interest rates low for a long time, and the ECB verbal interventions were seen as a temporary setback in the euro rally up to $1.2 and higher. In late September, things have radically changed.

The COVID-19 death rate in the USA has exceeded 200,000, the average number of deaths over the past seven days has contracted to 767, from 1100 in early August. The number of new coronavirus cases is growing slower than in Europe, where the indicator has reached record highs in many countries. The second pandemic wave in the euro-area increases the risks of lockdowns, which would be a disaster for the euro-area economy, breaking the [EURUSD][1] uptrend.

Dynamics of COVID-19 death rate in the USA

Source : Wall Street Journal

The Fed’s shift to the average inflation targeting was seen as a bearish driver for the US dollar, as the federals funds rate was to be held in the range of 0%-0.25% for a long time. Most FOMC officials expected this. However, Charles Evans’s speech discouraged the greenback sellers. Chicago Federal Reserve President said if Congress fails to pass a fiscal package, the US economy risks a longer, slower recovery, if not an outright recession. Further monetary easing by the Fed would be fruitless, and the federal funds rate could be hiked before the inflation reaches 2%.

Such suggestions make ECB verbal interventions irrelevant. The [EURUSD][1] can be falling without them. After all, the euro exchange rate is not so high by historical standards. It is at about the level of $1.17, from which the single European currency started in 1999, and it is far from the $1.5 level that took place after the previous global economic crisis. Christine Lagarde could encourage the Fed to respond. For example, Jean-Claude Trichet announced the euro was too strong in 2004. Allan Greenspan responded that the US trade deficit would send the dollar down, strengthening the euro.

[EURUSD][1] trading plan today

The [EURUSD][1] drop below 1.17 is natural, as the bulls’ benefits have exhausted. The price can continue falling to 1.157-1.16 amid several bearish factors. They are the further deterioration of the epidemiological situation in the euro-area, lack of transparency in the Fed’s policy of average inflation targeting, and the market volatility ahead of the US presidential election. Otherwise, if the COVID-19 death rate is not so high as earlier, the vaccines are developed, and Joe Biden becomes the US president, euro bulls might restore the uptrend. So, it could soon be relevant to buy the euro on the price fall.

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][2]. 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][3] your trading account.
  • Telegram chat for traders: . We are sharing the signals and trading experience
  • Telegram channel with high-quality analytics, Forex reviews, training articles, and other useful things for traders

Price chart of EURUSD in real time mode

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. my.liteforex.com/?category=analysts-opinions&slug=dollar-is-shooting-euro-forecast-for-23092020&openPopup=%2Fregistration%2Fpopup&utm_source=blog&utm_medium=article&utm_campaign=bonus
  3. my.liteforex.com/deposit/?category=analysts-opinions&slug=dollar-is-shooting-euro-forecast-for-23092020&promo_code=BLOG&utm_source=blog&utm_medium=article&utm_campaign=bonus