News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.



Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Please try again
More View more
Real Time News
  • Did you know a Doji candlestick signals market indecision and the potential for a change in direction. What are the top five types of Doji candlesticks? Find out
  • RT @FxWestwater: $NZDUSD Struggles as RBNZ Hike Bets Dim. Australian Retail Sales, Chinese Data Near Link: https:/…
  • Heads Up:🇯🇵 BoJ Monetary Policy Meeting Minutes due at 23:50 GMT (15min)
  • Key levels in forex tend to draw attention to traders in the market. These are psychological prices which tie into the human psyche and way of thinking. Learn about psychological levels here:
  • Senate GOP blocks bill combining debt ceiling with government funding - BBG
  • The Consumer Price Index, better known by the acronym CPI, is an important economic indicator released on a regular basis by major economies to give a timely glimpse into current growth and inflation levels. Learn how to better understand CPI here:
  • Japan says North Korea may have launched ballistic missile Kyodo via BBG
  • Senate GOP has votes to block debt limit, government funding bill - BBG
  • While Bitcoin is really buried into that support at the moment, Ethereum has been more range-bound of recent and as of this writing, price is not quite close to range support. Get your market update from @JStanleyFX here:
  • 🇰🇷 Consumer Confidence (SEP) Actual: 103.8 Previous: 102.5
Euro Forecast: EUR/USD Outlook Upbeat on Sunny Market Sentiment

Euro Forecast: EUR/USD Outlook Upbeat on Sunny Market Sentiment

Martin Essex, MSTA, Analyst

Fundamental Euro Forecast: Bullish

  • Last week was a curious one, with trader confidence upbeat as the US Democrats winning control of the Senate outweighed any concerns about the storming of the Capitol.
  • That suggests further flows to come out of the safe-haven US Dollar into ‘risk-on’ currencies such as the Euro, the British Pound and the Australian Dollar.

Euro price set for further gains

It’s not often that the markets welcome a government with total control that promises to spend money in mouth-watering quantities. Yet, last week, the markets welcomed warmly the US Democrats winning effective control of the Senate, giving them the Presidency and both Houses of Congress. What’s more, Wall Street opened at a record high after Joe Biden was confirmed as the next US President even though, just hours earlier, there had been riots at the Capitol.

This suggests strongly that the upbeat market mood will continue into the coming week, and in the FX markets that means more money flowing out of the safe-haven US Dollar into currencies seen as riskier such as the Australian and New Zealand Dollars, the British Pound and the Euro.

Like to know more about how important sentiment is in the FX markets? Check out this article

For sure, there will likely be bumps along the road but over the course of a week when almost nothing is on the Eurozone economic calendar except industrial production and trade figures, the USD side of the EUR/USD equation will dominate business.

EUR/USD Price Chart, Daily Timeframe (October 22, 2020 – January 7, 2021)

Euro Forecast: EUR/USD Outlook Upbeat on Sunny Market Sentiment

Source: IG (You can click on it for a larger image)

As the chart above shows, EUR/USD has been climbing steadily since the start of November and it would now be a surprise if it did not hit 1.24 if not in the coming week then soon after – perhaps after some profit-taking and short-covering.

Incidentally, the coronavirus pandemic has slipped into the background in the markets generally on an assumption that it will be defeated by the new vaccines that have been developed. That too has boosted sentiment, with the Euro likely to be among the main beneficiaries.

We look at currencies regularly in the DailyFX Trading Global Markets Decoded podcasts that you can find here on Apple or wherever you go for your podcasts

--- Written by Martin Essex, Analyst

Feel free to contact me on Twitter @MartinSEssex

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.