Forex Forecast And Cryptocurrencies Forecast For December 21 - 25

 

Coins, Banknotes, Money, Currency, Finance, Cash

First, a review of last week’s events:

EUR/USD 

According to Bank of America Merrill Lynch, the most popular strategy in the market after “buy shares” is “sell the dollar”. Speculative short positions in this currency have risen to a two-year high. The USD index (DXY) has fallen below 90, while it was at 102.82 on March 15, 2020. As for the retreat of the dollar in recent days, it is taking place against the background of the discussion in the US Congress of an additional package of fiscal stimuli. After all, every new dollar poured into the country's economy will lead to a decrease in its purchasing power.

The Federal Reserve meeting held on Thursday, December 17, had virtually no effect on market sentiment. The interest rate remained at the same level, and, one might say, a blissful pre-Christmas mood prevailed at the press conference: nothing new was said about the prospects for further quantitative easing and no worries about the current state of the economy were voiced. Although, perhaps, such passivity was caused not only by Christmas, but also by the change of the US President. The new owner has not yet settled in the White House. And the old one is already a lame duck.

True, thanks to the hopes of investors for the future growth of the S&P 500 and for a positive outcome of the Brexit negotiations, the EUR/USD pair still continued its movement northward, adding about 140 points in a week. As for the final chord, it sounded at the height of 1.2250;

GBP/USD

With the weakening USD and hopes that the Brexit talks will succeed at the last moment, the pair continues to push higher. At the week's high, December 17, it reached 1.3625, showing a gain of as much as 400 points. However, then a correction followed, and it completed the five-day period just below the level of 1.3500.

Belief in the deal is fueled by media reports that the fishing problem in British waters remains the last hurdle. The markets were encouraged by the statements of the head of the European Commission, Ursula von der Leyen, who said that there is a "narrow path" to the agreement, as well as European Commissioner for Internal Trade Michel Barnier, who confirmed that "the possibility of a trade agreement remains."

Britain also seems to agree to the deal, but, as it was stated, "not at the cost of sovereignty, and control should include the sea as well." Prime Minister Boris Johnson has threatened to keep European fishermen out of British waters for at least eight years if his three years quota fishing proposal is not accepted.

In general, Hamlet's question “To be or not to be?”, which has been sounding for 420 years, as applied to Brexit, is still open;

USD/JPY

The yen is stable, US Treasuries remain in the same trading range, the dollar is weakening, the USD (DXY) index is falling. All this allows the USD/JPY pair to continue its smooth descent within the downstream medium-term channel, which began at the end of last March. On Thursday December 17, it reached the midline of this channel, fixing a weekly low at 102.85. The last point in the five-day period was set at 103.30;

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Notice: These materials should not be deemed a recommendation for investment or guidance for working on financial markets: they are for informative purposes only. Trading on financial markets is ...

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