empty
21.08.2023 08:32 PM
EUR/USD correction will end sooner or later

Power lies in truth. And the truth is that the stronger the U.S. economy appears, the worse for the dollar in the medium term. Americans will absorb European and Chinese exports and help the world economy get back on its feet. This is excellent news for pro-cyclical currencies, including the euro. EUR/USD will rise. It just needs to give the main currency pair some time.

At first glance, dollar enthusiasts have nothing to worry about. The leading indicator from the Atlanta Fed is projecting a 5.8% growth in U.S. GDP in the third quarter, the best economic growth in the last 20 years if we exclude the post-pandemic recovery period. Most likely, such figures mean that nothing terrible will happen to the U.S. in 2024. However, this should not mislead the 'bears' in the EUR/USD market.

Dynamics of the American economy

This image is no longer relevant

In August, the U.S. dollar proved to be more resilient than one might have assumed, given the weaknesses of its main competitors. The Eurozone continues to teeter on the brink of recession, and rising gas prices bring back the specter of an energy crisis in the Old World. China is probably the biggest disappointment of 2023. Its economy is recovering from COVID-19 much slower than expected. The rate cut by the People's Bank of China leads to a weakening of the yuan and is perceived as panic within chinese officials.

However, this won't last forever. Thanks to the strength of the U.S., both the currency bloc and China will rise again. Moreover, the emerging Goldilocks regime will lead to an increase in American stock indices and improve the global risk appetite.

According to nearly 70% of those surveyed by the National Association for Business Economics, the Federal Reserve will be able to bring inflation down to the 2% target without causing a recession. In March, only 30% thought so. Three out of four respondents see PCE at around 3% by year-end. Inflation slowdown amid rapid economic growth creates a favorable backdrop for American stocks. The resumption of the upward trend in the S&P 500 is key to the rise of EUR/USD.

According to BNY Mellon Investment Management, the ECB will raise the deposit rate to 4% in September and probably bring it to 4.25% amid sticky inflation in the services sector and high wage growth rates, contradicting market consensus. Investors believe that the cycle of monetary policy tightening is over. If the company is right, EUR/USD should rise.

Dynamics of rates, yields, and inflation in the U.S. and the Eurozone

This image is no longer relevant

This image is no longer relevant

Thus, the risks of restoring an upward trend in the primary currency pair are quite significant. The question is how much time it will take. How soon will the euro find its bottom? Fed Chairman Jerome Powell's speech at Jackson Hole may provide a clue.

Technically, the 'bulls' in the EUR/USD are trying to play a doji bar at the lower boundary of the fair value range of 1.086-1.111 and switch to counterattack. Meanwhile, the pair's rise above 1.091 may serve as a basis for short-term long positions.

Seleccione el marco de tiempo
5
min
15
min
30
min
1
hora
4
horas
1
día
1
s.
Gana con los cambios en el valor de las criptomonedas con InstaForex.
Descarga MetaTrader 4 y abre tu primera operación.
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    UNIRSE AL CONCURSO

Recommended Stories

El caos en los mercados continuará (hay probabilidad de una continuación de la caída local del #USDX y del precio del oro)

Los mercados continúan actuando a ciegas en medio de las acciones caóticas de D. Trump, quien intenta sacar a EE.UU. de la más profunda crisis integral como el barón

Pati Gani 11:26 2025-05-23 UTC+2

Análisis del par GBP/USD. El 22 de mayo. El mercado vuelve a responder sin ambigüedades a Trump.

El par de divisas GBP/USD continuó su movimiento hacia el norte el miércoles, aunque a primera vista no había razones claras para ello. Sí, el nivel de inflación (el único

Paolo Greco 07:12 2025-05-22 UTC+2

Análisis del par EUR/USD. El 22 de mayo. Un nuevo golpe al dólar: «One big beautiful bill act».

El par de divisas EUR/USD continuó su movimiento ascendente durante el miércoles. El dólar estadounidense lleva cayendo sin pausa por más de una semana, algo que no sucedía en todo

Paolo Greco 07:12 2025-05-22 UTC+2

El Bitcoin se convierte en víctima de estafadores

La confianza en el mundo financiero no solo puede perderla el dólar estadounidense. La información sobre el robo de datos de aproximadamente 197 mil clientes de Coinbase, la mayor plataforma

Marek Petkovich 14:05 2025-05-19 UTC+2

Análisis del par GBP/USD. El 19 de mayo. ¿Qué esperar de la inflación en EE. UU.?

El par de divisas GBP/USD continuó el viernes su movimiento lateral, que ya se observa desde hace un mes. En principio, en la ilustración del marco temporal de 4 horas

Paolo Greco 07:26 2025-05-19 UTC+2

Análisis del par EUR/USD. El 19 de mayo. La guerra comercial frena al dólar.

El par de divisas EUR/USD se negoció con caídas mínimas durante la jornada del viernes, con una volatilidad en general a la baja tras un «abril loco» La divisa estadounidense

Paolo Greco 07:26 2025-05-19 UTC+2

EUR/USD. En la trampa del rango lateral

El par euro-dólar sigue cotizando dentro de un rango estrecho, reaccionando de forma débil a acontecimientos fundamentales importantes. Por tercer día consecutivo, los compradores de EUR/USD intentan volver

Irina Manzenko 12:47 2025-05-16 UTC+2

Análisis del par GBP/USD. El 15 de mayo. El calvario del dólar continúa.

El par de divisas GBP/USD continuó su crecimiento el miércoles, que había comenzado el martes. Recordemos que el martes el mercado no tenía ninguna razón de peso para deshacerse masivamente

Paolo Greco 07:30 2025-05-15 UTC+2

Análisis del par EUR/USD. 15 de mayo. La fe del mercado en el dólar está por el suelo.

El par de divisas EUR/USD continuó su recuperación durante el miércoles en un contexto de calendario macroeconómico absolutamente vacío. Ni siquiera destacamos el único informe del día sobre la inflación

Paolo Greco 07:30 2025-05-15 UTC+2

Análisis del par GBP/USD. El 14 de mayo. Solo importa el tratado comercial.

El lunes, la moneda estadounidense se fortaleció considerablemente tras el éxito en la primera ronda de negociaciones entre EE. UU. y China, aunque, en esencia, ambas partes solo acordaron

Paolo Greco 07:22 2025-05-14 UTC+2
¿No puede hablar ahora mismo?
Ingrese su pregunta en el chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.