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Jan 08 - 08:55 AM

EUR/USD - COMMENT-EUR/USD's Stability Is Key To Its Strength

By Martin Miller  —  Jan 08 - 07:30 AM

EUR/USD's relative stability in 2020 could make it the currency pair of choice for FX traders seeking some predictability at the start of 2021.
That should lead to EUR/USD receiving natural demand, which could take it higher.

A plot of the daily returns for the entire year 2020 shows the euro versus the dollar has been much more stable than its major rivals, including the safe-haven Japanese yen.
USD/JPY, GBP/USD and AUD/USD have all been much more volatile than EUR/USD.

The overall scope is for eventual EUR/USD gains to re-engage the 2018 1.2556 peak.
EUR/USD got a huge boost after it closed above the major 1.2103 Fibo, 76.4% of the 1.2556 to 1.0636 (2018 to 2020) decline, a few weeks ago.
Fourteen-month momentum remains positive, reinforcing the underlying bullish long-term market structure.

Democratic control of Congress will help the party of President-elect Joe Biden push through larger fiscal stimulus nL8N2JJ1JA that in turn will keep downward pressure on the dollar and help EUR/USD head higher.

For more click on FXBUZ


Monthly Chart: Click here

2020 FX Daily Returns Chart: Click here

Source:
Refinitiv IFR Research/Market Commentary

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