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EUR USD in 2020 | Technical Forex Analysis

By on October 4, 2020 0 91 Views
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The EUR USD has been steadily declining over 2019 and we thought it was time to perform a long-term technical forex analysis for the pair. EUR USD in 2020 could hold some surprises for traders, so we’ve also included the fundamentals that will be influencing the EUR USD chart over the coming 12 months.

From a technical standpoint the 1.10 level seems important as a support on the EUR USD
chart, as does 1.085, the 2017 low. On the resistance side the levels to watch are 1.118, the high from last month and then 1.1285. A break above the latter could mean the trend is broken and some significant upside is coming for EUR USD in 2020.

From a fundamental point of view the EUR USD trading analysis reveals three factors that will most likely impact the most traded forex pair. The first one is that the euro is undervalued because of exports being greater than imports. The exact percentage of this undervaluation is hard to pinpoint and EUR USD does adjust to most macro trends over time. If this imbalance persists (which it most likely will) then we could see another 5% move down on the chart.

The second factor that EUR USD traders have to keep in mind is that large forex market players are betting against the Eurozone currency in the last several months. This is a double-edged sword. More often than not funds and banks trading with large volumes manage to follow the market and profit. But when they stop trading in a certain direction, that could be a signal that the trend is exhausted.

What does this mean for our EUR USD chart analysis? It could be a sign of a rebound in the first months of 2020. From a technical standpoint it can be interpreted as a continuation of the rebound from the 1.09 area, although the larger downtrend appears to be intact.

The third and perennial factor that EUR USD traders should keep in mind are the interest rates of the ECB. EUR USD trading will be impacted by the fact the European Central Bank can’t go much lower on the levels it has in place now. This is another force that could push the EUR/USD chart upwards in 2020.

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