Logo

Posts

Forecast for USD price for 23 October 2020

2020-10-23

2020-10-23

No illusions for dollar. Forecast for 23.10.2020Dmitri Demidenko

A blue wave is more and more likely to happen, but the greenback is growing ahead of the EU business activity data publication. How will the [EURUSD][1] react to bad stats? Let’s find it out and make a trading plan.

Fundamental forecast for dollar for today

The markets are tired of the US fiscal stimulus story and want to “play uncertainty” ahead of the US presidential election. Together with US strong macrostatistics, that made [EURUSD][1]’s quotes fall. My strategy of [selling the pair from the levels of 1.185 and 1.181][2] is working out, but don’t get carried away with it. Joe Biden’s victory prospects are more and more clear. So is the euro’s bright future.

According to Morgan Stanley and JP Morgan, the democrats’ victory will cut a risk of the US protectionist policy’s second wave. That will have a positive impact on the export-oriented eurozone and the local currency. Deutsche Bank forecasts that the [EURUSD][1] will rally to 1.2 in case the White House has a new tenant.  Tax hikes, budget deficit growth and lower trading tension will put pressure on the dollar as a safe-haven asset. On the contrary, Trump’s unexpected victory will support the greenback amid higher uncertainty and the risk of a new trading war.

Despite the ratings and Biden’s confident looks during the last debates, there’s still a chance of losing the race to the Republicans, as it happened in 2016. So, investors are not in a hurry for selling dollars. What’s more, the US economy is showing a surprising resistance to the pandemic: jobless claims are at their lowest since March, while sales in the secondary housing market have soared to 14-year peaks.

US labour market stats

Source: Bloomberg.

New Covid cases grew to record highs in Europe, and Spain became the first European country to have over 1 million of cases. That puts pressure on the euro. Besides, the demand for the eurozone’s peripheral bonds isn’t a high as expected: the Italian, Greek, and Portuguese bond yield is growing, which means the ECB is unlikely to expand the asset- buying program on 29 October. However, if the business activity data turn out to be disappointing, QE expansion will be more probable, and bond prices will grow too.

Even if the pandemic hit both demand and supply, the industrial sector is recovering faster. Its share in Germany’s and Italy’s GDPs (21% and 17%) is higher than in France and Spain (12% and 11%), so Germany and Italy are supposed to feel better.

European business activity index

Source: Financial Times.

Trading plan for[ EURUSD][1] for today

Traders are more interested in the [EURUSD][1]’s reaction to October’s business activity statistics. There are fears that actual data may turn out worse than Bloomberg’s forecasts because of the second coronavirus wave. At the same time, the euro’s fall ahead of the important releases lets us presume that negative news have already been factored in quotes in part. So, there will be an opportunity to buy the regional currency after a slight drawdown. I think the bears’ inability to draw the pair below 1.177-1.178 will point to their weakness and allow us to go long at a breakout.

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][3]. 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][4] 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. www.liteforex.com/blog/analysts-opinions/if-only-euro-could-forecast-for-eurusd-for-20102020/
  3. my.liteforex.com/?category=analysts-opinions&slug=no-illusions-for-dollar-forecast-for-23102020&openPopup=%2Fregistration%2Fpopup&utm_source=blog&utm_medium=article&utm_campaign=bonus
  4. my.liteforex.com/deposit/?category=analysts-opinions&slug=no-illusions-for-dollar-forecast-for-23102020&promo_code=BLOG&utm_source=blog&utm_medium=article&utm_campaign=bonus