Saturday, July 4, 2020 4:14 PM EDT
FUNDAMENTAL EURO FORECAST: BEARISH
- The European Council President is expected to propose a more modest EU budget this week.
- The Council is hoping EU leaders will agree to it at a summit later this month but wrangling over how best to help the weaker members of the bloc recover from the Covid-19 pandemic will likely continue.
- Unless the EU governments can sort out their disagreements soon, a drop is likely in EUR/USD in this year’s third quarter.
EURO PRICE OUTLOOK: WEAKNESS AHEAD
European Council President Charles Michel is expected to propose a marginally more modest 2021-27 EU budget this week in an attempt to persuade more frugal bloc members to drop their resistance to a coronavirus recovery plan.
The Council is hoping that EU leaders will agree a deal at a summit later this month but wrangling over whether the recovery fund should consist primarily of loans or grants will likely continue.
Unless the EU governments can sort out their disagreements on how best to help the weaker members of the bloc such as Italy and Spain, Portugal and Greece, falls are likely in EUR/USD in this year’s third quarter.
EUR/USD PRICE CHART, DAILY TIMEFRAME (APRIL 10 – JULY 2, 2020)
Chart by IG
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