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US dollar price forecast 28 January 2021

2021-01-28

2021-01-28

Forex in February: fighting for vaccine flares up. Forecast for GBPUSD, EURGBP, AUDUSD, NZDUSD, EURAUD, EURNZD…Dmitri Demidenko

$1.9 trillion fiscal stimulus, vaccinations, and US-China relations. These are three main topics that financial markets will be following in February. How will they affect [GBPUSD][1], [EURGBP][2], [AUDUSD][3], [NZDUSD][4], [EURAUD][5], [EURNZD][6], [USDSEK][7]? Let’s discuss the market outlook and make up a trading plan.

Monthly G10 currencies fundamental forecast

At the end of December, the international currency market was in a state of euphoria. Global risk appetite was growing by leaps and bounds, and the US dollar was falling. It would seem that nothing foreshadowed a storm. All the more surprising were the statistical analysis signals with a fundamental bias: ladies and gentlemen, do not ignore the facts - greenback in January usually at its best! And the seasonal factor won back! All four [announced strategies][8], including selling [EURUSD][9] and [AUDNZD][10], and buying [USDCHF][11] and [USDSEK][7], have been profitable. The more interesting it will be to observe the research in the field of statistics in February.

The main favorites at the end of winter are the Australian and New Zealand dollars. From 1975 to 2020, the Aussie closed in the green zone 26 times out of 46, and the Kiwi - 25 times out of 46. At the same time, for the last three years, both currencies have invariably been in the red in February. I associate it with the factors of the trade war between the USA and China and a pandemic. The British pound and the Norwegian krone are prominent outsiders in Forex in the middle of the first quarter. Attention is drawn to the fact that all European monetary units felt neither good nor bad.

Rise-fall periods

Source: BoE, LiteForex calculations.

An analysis of the medians and averages suggests that buying the Australian dollar and the Swedish krona at the end of winter is associated with increased risks. Despite the leadership in the first indicator, the Aussie is among the main losers in the second. This speaks in favor of a severe [AUDUSD][3] pullback in the event of an escalation of the conflict between the US and China

Averages and medians

Source: BoE, LiteForex calculations.

Slow vaccination in Sweden can also deliver troubles for the [USDSEK][7] bears. Statistics indicate that in bad times for itself, the krona sagged by an average of 3% per month, which is the worst result among all G10 currencies.

Price dynamics during rise-fall periods

Source: BoE, LiteForex calculations.

In my opinion, the main topics of February will be the passage of the $1.9 trillion fiscal incentive from Joe Biden through Congress, the speed of the vaccination campaign, and the new US president’s attitude towards Beijing. Europe’s vaccine problems in January are likely to persist for several weeks. The EU is asking AstraZeneca to take some of the doses from Britain and transfer them to mainland Europe. A new conflict is brewing between Brussels and London. It could turn into trouble for the [GBPUSD][1] bulls in the first half of February and for the [EURGBP][2] bears at the end of the month.

If Joe Biden slightly softens the United States’ position about China (he has already canceled Donald Trump’s decree banning American investments in shares of Chinese companies related to the military sector), then at the end of winter, the [EURAUD][5] and [EURNZD][6] sales and [AUDUSD][3] and [NZDUSD][4] purchases will look pretty attractive.

Traders can work out the Swedish krona’s seasonal weakness by forming long [USDSEK][7] positions. In this case, the reason for buying will be the development of the corrective movement in US stock indices and the associated deterioration of the global risk appetite.

Price chart of GBPUSD 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.

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  1. my.liteforex.com/trading/chart?symbol=GBPUSD&returnUrl=true
  2. my.liteforex.com/trading/chart?symbol=EURGBP&returnUrl=true
  3. my.liteforex.com/trading/chart?symbol=AUDUSD&returnUrl=true
  4. my.liteforex.com/trading/chart?symbol=NZDUSD&returnUrl=true
  5. my.liteforex.com/trading/chart?symbol=EURAUD&returnUrl=true
  6. my.liteforex.com/trading/chart?symbol=EURNZD&returnUrl=true
  7. my.liteforex.com/trading/chart?symbol=USDSEK&returnUrl=true
  8. www.liteforex.com/blog/analysts-opinions/forex-in-january-is-dollar-back-in-the-game/
  9. my.liteforex.com/trading/chart?symbol=EURUSD&returnUrl=true
  10. my.liteforex.com/trading/chart?symbol=AUDNZD&returnUrl=true
  11. my.liteforex.com/trading/chart?symbol=USDCHF&returnUrl=true