While 2020 saw the US dollar post its biggest yearly loss since 2017, the year also saw the Aussie dollar hit 33 month highs in one of its strongest performances in years.
While the greenback became, as it always does at times of intense stress, the safe haven of choice in the confused days of the first wave of the pandemic in March and April, it reversed course as the Federal Reserve and Trump administration reveals plans for trillions of dollars in support and stimulus.
They were delivered and steadied the rout and turned it into the biggest and fastest market recovery in US history. But as we start 2021, the question is how much potency does this spending, as well as the smaller end of year sending package, still retain for the markets.
As the year goes on, governments will find themselves under more pressure to increase spending and support, especially if employment is slow to recover or starts falling again.
The US dollar hit a three-year high of 102.99 against a basket of currencies in March, before ending the year at 89.96, down 6.77% for the year and 12.65% from that March peak.
Record low interest rates and ongoing Fed bond purchases may have dented the dollar’s appeal, but they have also powered the massive rebound in markets and ignited new fears (misplaced) about the return of inflation.
Continuing expectations of extra fiscal stimulus from the Biden administration and rising budget and current account deficits as well as soaring debt will add extra pressures to the greenback’s path in the coming year.
The euro ended 2020 at $1.2215, up 8.97% for the year. It reached $1.2310 on Wednesday, the highest since April 2018, but lost ground as investors squared positions for the year.
Euro/US Dollar Exchange Rate
Today’s Forex Rates
EUR/USD FX Polls
Overall, the bias in prices is: Upwards.
The projected upper bound is: 1.24.
The projected lower bound is: 1.21.
The projected closing price is: 1.23.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 6 white candles and 3 black candles for a net of 3 white candles. During the past 50 bars, there have been 28 white candles and 21 black candles for a net of 7 white candles.
A rising window occurred (where the top of the previous shadow is below the bottom of the current shadow). This usually implies a continuation of a bullish trend.
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 36.9731. This is not an overbought or oversold reading. The last signal was a sell 9 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 59.77. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 2 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 8 period(s) ago.
Rex Takasugi – TD Profile
FOREX EUR= closed up 0.011 at 1.225. Volume was 82% below average (consolidating) and Bollinger Bands were 16% narrower than normal.
Open High Low Close Volume 1.223 1.226 1.222 1.225 19,670
Technical Outlook Short Term: Neutral Intermediate Term: Bullish Long Term: Bullish
Moving Averages: 10-period 50-period 200-period Close: 1.22 1.20 1.16 Volatility: 9 7 8 Volume: 91,563 110,159 108,399
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
FOREX EUR= gapped up today (bullish) on light volume. Possibility of a Common Gap which usually coincides with a lack of interest in the security. Common Gaps are fairly irrelevent for forecasting purposes. Four types of price gaps exist – Common, Breakaway, Runaway, and Exhaustion. Gaps acts as support/resistance.
FOREX EUR= is currently 6.0% above its 200-period moving average and is in an upward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. Our volume indicators reflect volume flowing into and out of EUR= at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on EUR= and have had this outlook for the last 41 periods.