Euro price forecast as of October 12 2020

2020-10-12

Forex after the vote: Euro is going to rally. Forecast as of 12.10.2020Dmitri Demidenko

Will the [EURUSD][1] bulls go ahead after the US presidential elections? What currencies are the best to buy on the investment horizon of six- nine months? Let us see the future investment ideas and make up a long- term Forex trading plan.

Fundamental euro forecast for six months

Financial markets are currently focused on the US presidential election. Investors bet on the assets according to the approval ratings of Donald Trump and Joe Biden. Nonetheless, Forex trading doesn’t end after November 3, and we need to select an investment strategy to trade in the long term. If we assume that trade wars will be left in the past, and the COVID-19 vaccines will help the global GDP recover, the idea of the divergence in the economic expansion will be quite useful when forming an investment portfolio.

According to Bloomberg’s research, the largest global economies will suffer from the pandemic fallout over the next few years. 8 members of the G 20 countries will have a lower GDP in 2020 than in 2019. Besides, China, India, Spain, Italy, France, and Britain feature a higher growth next year, while Australia, the USA, and Japan are unlikely to show impressive performance.

Forecasts for economic growth

Source : Bloomberg

The situation in China is clear. Because of the effective management of the pandemic, it will be able to expand the economy already in 2020. In 2021, the Chinese economy will continue growing amid the strengthening of not only the domestic demand but also with the help of foreign demand. The Chinese yuan is rising steadily, and even the attempts of the Chinese officials to interfere do not discourage the [USDCNH][2] bears. The export-led euro-area economy strongly depends on foreign buyers, and the expansion of the largest Asian economy will support the euro. The introduction of the coronavirus vaccines in January-March will provide benefits to the tourism-led countries, such as Italy and Spain. The euro should feature excellent performance in the second quarter of 2021.

In 2017, the [EURUSD][1] was rising steadily, the currencies of Eastern Europe, the Polish zloty, the Czech koruna, and the Hungarian forint, were also strong. I believe in May-September 2021 the situation will repeat. The Eastern European region depends on the euro-area demand. Besides, the ECB’s ultra-easy monetary policy and the financial assistance provided by the EU will support Poland, The Czech Republic, and Hungary. I would pay attention to the Polish zloty, as Poland received one of the biggest stimulus packages in the EU because of Donald Tusk.

Grants and loans provided to the EU countries

Source : Bloomberg.

The GBP FX rates include too much political negative resulted form Brexit. If the EU and the UK manage to sign a deal at the last moment, the [GBPUSD][3] will be rising despite weak economic data and the talks about negative rates the Bank of England could introduce.

[EURUSD][1] trading plan for the next six months

If there is a Brexit deal and the UK economy is expanding at the highest rate among the G20 countries, the sterling could become one of the Forex leaders in the next 6-9 months. The bet on the GBP will fail if the UK and the EU divorce without a deal. The second quarter of 2021 will be the best for the [EURUSD][1] bulls while, starting from the May-June period, it will be relevant to sell the [USDPLN][4], [USDCZK][5], and [USDHUF][6].

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][7]. 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][8] 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:

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