Logo

Posts

US dollar price forecast October 7 2020

2020-10-07

2020-10-07

Dollar won’t give the money! Forecast 07.10.2020Dmitri Demidenko

The illness and the recovery of Donald Trump, his willingness to stop coronavirus stimulus negotiations with Democrats shake the markets and support the greenback; how long will it last? Let us discuss the forex trends and make up the [EURUSD][1] trading plan.

Weekly US dollar fundamental forecast

There is no money, but you should hold up! Donald Trump says he will end coronavirus stimulus talks with Democrats, accusing House Speaker Nancy Pelosi of failing the negotiations. The US president says the aid will be provided immediately after he wins the election on November 3. Investors do not believe. Americans will receive the money only in January or February, which will deprive the unemployed and small businesses of support for 4-5 months and significantly slows down the US economic recovery. Investors’ concerns about such a scenario sent the US stock indexes down, and the greenback has strengthened.

Trump appeared to contradict his earlier message. The US president announced the end of the negotiations after  Jerome Powell calling for more fiscal stimulus and saying Congress has a low risk of “overdoing it, while a lack of sustained support from the federal government could “lead to a weak recovery, creating unnecessary hardship for households and businesses.” Of course, the US president does not have to obey the Fed, but the fourth quarter’s continuous GDP growth could have supported Trump. After all, he promised a permanent 3% growth in 2016.

Nancy Pelosi claims that chaos reigns in the White House, and Donald Trump should get tested for the effects of steroids, which he took in the clinic on the brain. After all, Americans have lived with a bizarre president for almost four years; they should have used to it. Trump claims the fiscal stimulus will be delivered after his victory in the election. Confidence is good; however, the approval ratings suggest the opposite. Furthermore, does it make sense to vote for the president who fails to fulfill his promises? It is not only about 3% of GDP growth. In 2016, Trump claimed he would reduce the US foreign trade deficit, but August’s deficit rose to $67 billion, the highest level in the last 14 years.

Dynamics of USD and US trade balance

Source : Trading Economics

Donald Trump is the source of uncertainty, which strengthens the US dollar. Besides, investors are not sure that Trump’s victory will result in the [S&P 500][2] rally. On the contrary, bulls are now betting on Joe Biden. If Biden becomes the president, the US government will be more likely to provide the additional fiscal stimulus. In this case, the global risk appetite will increase, and investors will be selling off the greenback.

Will it support the [EURUSD][1] uptrend? Just a few weeks ago, I was sure it would. However, the second pandemic wave in the euro area makes its adjustments. According to Christine Lagarde, France’s and Spain’s GDPs won’t go back to the pre-crisis levels before 2022, which forces the central bank to use stimulus longer than expected. In case of necessity, the ECB will expand monetary stimulus, including further interest-rate cuts into the negative area.

Weekly [EURUSD][1] trading plan

The [EURUSD][1] failed to break out level 1.18, which suggests their weakness. The bet on [sell trades][3] in the short run is working out, as well as the [forecast][4] for the pair consolidation in the range of 1.161-1.177. I still recommend selling the euro on the price rise and buying on the fall to the lower border of the consolidation range.

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][5]. 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][6] 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/trading/chart?symbol=SPX&returnUrl=true
  3. www.liteforex.com/blog/analysts-opinions/dollar-enjoys-uncertainty-forecast-as-of-05102020/
  4. www.liteforex.com/blog/analysts-opinions/dollar-goes-up-amid-the-troubles-forecast-as-of-30092020/
  5. my.liteforex.com/?category=analysts-opinions&slug=dollar-wont-give-the-money-forecast-07102020&openPopup=%2Fregistration%2Fpopup&utm_source=blog&utm_medium=article&utm_campaign=bonus
  6. my.liteforex.com/deposit/?category=analysts-opinions&slug=dollar-wont-give-the-money-forecast-07102020&promo_code=BLOG&utm_source=blog&utm_medium=article&utm_campaign=bonus