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Dollar wants to smile again. Forecast as of 05.02.2021
The leading vaccination rate in the USA compared to the euro area contributes to the expansion of divergence in economic growth and presses down the EURUSD. How long can this last? Let us discuss the Forex outlook and make up a trading plan.

Fundamental US dollar forecast for six months
The greenback seems to be smiling… The USD index has been growing for four weeks out of five this year, featuring the best trading performance since October in the first week of February. It reminds me of the dollar smile theory. According to the theory, the USD, first, strengthens amid the concerns about the recession risks; next, the dollar weakens amid the Fed's aggressive monetary stimulus. Then, it strengthens again amid the USD GDP rate outpacing the global growth.

The dollar smile theory fits well with the concepts of the greenback transformation from a safe-haven asset into a risky currency and uneven economic growth. The USD is strengthening even amid the growth of the US stock indexes, which break through all-time highs. Joe Biden is ready to compromise with the Republicans and reduce the previously announced fiscal stimulus amount of $1.9 trillion, but hardly by much. Investors expect $1 trillion, and if the actual aid package is larger, the S&P 500 will continue to rally. At the same time, the inverse correlation of stock indices with the US dollar is weakening, which, amid Treasury yields growth, suggests a change in the US dollar status. Why not use yesterday's safe-haven asset as a risky currency in carry trades today?
Remarkably, Reuters experts still believe that the current USD rally is just a temporary surge. According to 63 out of 73 economists, the greenback in 3 months will remain at current levels or decrease. The consensus forecast assumes EURUSD will rise to 1.23 and 1.25 in 6 and 12 months. Many experts believe that the outperformance of the US economy will ultimately crash the dollar. The US and China will become the drivers of the global GDP growth, which will negatively affect safe-haven assets. In addition to the progress in the euro-area vaccination campaign, this will result in the EURUSD uptrend recovery. I share the same point of view.

The main risks for this scenario are in the uneven recovery of the world economy, which will allow the dollar smile theory to work out, and suggest an earlier than currently assumed Fed’s monetary normalization. If the dollar bulls use both of the greenback’s advantages, we can consider the EURUSD uptrend to be broken down.

The uneven distribution of vaccines suggests that the GDP will grow in some countries and contract in other ones. But still, I hope that the EU's efforts to accelerate the vaccination process will be successful, and the euro area, together with China and the US, will become a driver of global economic growth. The Fed should consider the US economic situation and the global growth as well before deciding to wind down the QE.
For more information follow the link to the website of the LiteForex
https://www.liteforex.com/blog/analysts-opinions/dollar-wants-to-smile-again-forecast-as-of-05022021/?uid=285861726&cid=79634

Euro suffers losses. Forecast as of 04.02.2021
The slower the vaccination campaign progresses, the more likely are the lockdowns to continue and the recession to start in the euro-area. Besides, the Eurosceptics use the authorities’ failures for their purposes, which presses down the EURUSD. Let us discuss the Forex outlook and make up a trading plan.

Weekly euro fundamental forecast
Donald Trump lost the presidential election due to the pandemic. At first, the White House did not recognize the threat and then very slowly closed the economy for a lockdown. In the first wave of COVID-19, the EU acted much more efficiently, laying the foundation for the EURUSD uptrend. However, the slow vaccination in the euro area presses down the euro bulls and the EU governments. Eurosceptics go ahead, and the rise in political risks contributes to the euro fall.

Marine Le Pen appears to be almost the only serious opponent of Emmanuel Macron in France's 2022 presidential elections. Their confrontation, which ended in the victory of the current head of state, triggered the euro rally in 2017. Nobody knows what will happen this time. Nor is there any certainty that Mario Draghi will save Italy. Yes, the ex-president of the ECB is most likely the best person for the worst job. Yes, financial markets were optimistic about his willingness to manage Italy's political crisis, which is evident from a narrower yield spread between Italian and German bonds. Still, it will be complicated for anyone to bring order to the chaos in which Rome lives today.
According to Bloomberg research, the euro-area economy is currently operating at 95% of its pre-pandemic capacity due to lockdowns. This is the equivalent of losing €12 billion a week. The euro area is several weeks behind the US in vaccination. The US will soon return to full-fledged work while the eurozone will maintain existing restrictions, which will cost it € 500-1000 billion within one or two months. Thus, the vaccination campaign directly impacts the economy and allows Eurosceptics to go ahead, which puts pressure on the euro. There is a clear divergence in economic growth, which is reflected in the different rates of the US and euro-area PMIs.
I don’t think that the surge of the euro-area inflation from -0.3% to 0.9% in January will be the reason for the ECB to pull back on the pandemic emergency purchase program. The rise in consumer prices resulted from temporary factors, and the Governing Council is likely to ignore it.

The US dollar is supported by the Treasury yield growth ahead of the auctions. In the week ending Feb 14, the Treasury plans to place 3-year bills, 10-year and 30-year bonds totaling $ 126 billion. The interest rates on the securities are rising, and investors remember that the growth of Treasury yields in January resulted in the greenback strengthening.

Weekly EURUSD trading plan
The current Forex sentiment makes banks abandon bullish forecasts for the euro. Nomura exits EURUSD longs, and Deutsche Bank says the pair can go down to 1.18. It is still relevant to hold down shorts entered at level 1.208 and enter short-term sell trades at least until the EURUSD goes up above the indicated level.
For more information follow the link to the website of the LiteForex
https://www.liteforex.com/blog/analysts-opinions/euro-suffers-losses-forecast-as-of-04022021/?uid=285861726&cid=79634
Dynamics of Italy-Germany 10 Year Bond Spread

Silver will feed the wolves of Wall Street. Forecast as of 01.02.2021
The attack on silver market tests the strength of such a phenomenon as Reddit traders. If the crowd of small traders succeeds, all the professionals will have to reckon with them. What if it doesn't? Let's discuss the market outlook and make up a trading plan.

Weekly silver fundamental forecast
January from time to time brings real shocks to financial markets, which makes people forget about politics, the economy, and even about a pandemic. At the beginning of 2015, the Swiss National Bank decided to stop spending its gold and foreign exchange reserves to hold the EURCHF bears at level 1.2. After that, the pair collapsed sharply, and the franc became the Forex best performer of the year before its end. At the start of 2020, due to the flash crash, the yen strengthened sharply, rising within a few minutes against the Australian dollar by 8%. In January 2021, it's time for Reddit newbie traders.

United in a crowd resembling a flock of animals, newbies brought hedge funds to their knees, pumping up GameStop prices by 1500%. After that, they began to be taken seriously. If earlier small traders had to look for large players' traces to earn money, now it is enough to enter the forum. Following the shares of the video game maker, silver came into the focus of the Reddit flock. As a result, the XAGUSD prices soared to 5-month highs, and the stocks of the largest ETF iShares Silver Trust grew by a record $944 million overnight.

The flock has far more options than any particular wolf on Wall Street. Professionals cannot agree to collude; otherwise, they will face a prison sentence. They incur more serious brokerage costs than small traders. The flock has other problems. A split may occur in its ranks at any time. Opinion leader Ken Griffin's calls to buy silver were initially met with enthusiasm, but then skeptics emerged. They noted that unlike GameStop, hedge funds had been net buyers of precious metals since mid-2019. Who are they going to fight against? Perhaps the flock leader, who has a lot of iShares Silver Trust shares in his portfolio, is merely pursuing his own goals of enrichment and will abandon the people following him at any moment?
In the case of GameStop, ordinary traders outplayed Wall Street professionals. However, the large traders can benefit from the attack on the silver market. Can a crowd of individual traders influence the precious metal market? The capitalization of the precious metal market ($48 billion) significantly exceeds the value of the shares of the manufacturer of video games when the securities began to soar in mid-January ($1.4 billion). The flock runs the risk of breaking teeth.

Weekly silver trading plan
In any case, the silver scam is a test of the durability of such a phenomenon as Reddit traders. If newbies manage to boost XAGUSD prices, regulators will have to get down to business. The market is already ceasing to fulfill some of its functions. The last thing we need is to turn the market into a distorting mirror. Failure can discourage newbies from becoming professional traders. However, a precedent has been set, and other forums or social networks may follow Reddit. In the meantime, the inability of silver to break out the resistance at $ 30.15-30.3 per ounce serves as a signal of the flock's mission's failure and the basis for sales.
For more information follow the link to the website of the LiteForex
https://www.liteforex.com/blog/analysts-opinions/silver-will-feed-the-wolves-of-wall-street-forecast-as-of-01022021/?uid=285861726&cid=79634
Dynamics of hedge funds positions and other silver market participants

Euro declares war. Forecast as of 29.01.2021
The verbal interventions of the European Central Bank could enrage Washington. And the ECB needn’t have interfered with the currency rates under the current conditions. The divergences in the economic expansion and vaccination rates press down the EURUSD. Let us discuss the Forex outlook and make up a trading plan.

Weekly euro fundamental forecast
If the ECB is willing to discourage investors by suggesting a potential interest rate cut, it should not mention the rise of Germany’s consumer prices. In January, the German inflation has surged from 0.7% to +1.6% and is likely to push the euro-area inflation up. This fact could mean that the European Central Bank will end the pandemic emergency purchase program earlier than expected, which could have supported the EURUSD bulls. However, the euro bulls haven’t enjoyed the success for a long time.

Following the president of the central bank of the Netherlands, Klaas Knot, the Governor of the Bank of Finland, Olli Rehn says the ECB will spare no effort to stimulate the inflation growth and is monitoring the euro exchange rate. According to Commerzbank, the choice of the European regulator's information campaign means that it has declared a currency war. The Governing Council’s officials' emphasis on cutting the interest rates and ordering research, whether the weakening of the US dollar is connected with a large-scale fiscal stimulus, suggests that the ECB is worried about the current euro exchange rate rather than the speed of its strengthening.
If the Commerzbank is correct, the ECB's verbal interventions should disappoint Janet Yellen, who promised to stop other countries' attempts to artificially depreciate their currencies. Besides, the inflation rebound could mess the ECB plans. The rise of Germany’s consumer prices could have resulted from temporary factors. However, according to the ING, ECB obviously underestimates the potential inflation growth following a period of persistently low inflation. The CPI increase will worsen the dispute among the Governing Council’s members, encouraging the ECB to start monetary normalization. If so, the EURUSD trend should turn up. However, the euro bulls are now concerned about defending their positions and preventing the euro from a deeper fall.

Slow vaccination progress in Europe and the fact that the USA, unlike the euro area, won’t slide into a double-dip recession press the euro exchange rate down. In fact, the ECB is going too far: verbal interventions are not needed in the current situation, they risk provoking the White House's anger.

In 2020, the US economy contracted 3.5%, the worst since the end of World War II and the first recession since 2009. However, thanks to fiscal stimulus of $900 billion from Donald Trump and $1,900 billion from Joe Biden, the US GDP, following a weak start in 2021, should rapidly rebound in the next quarters. The IMF notes that the US economy has enormous growth potential, and the World Bank calls for winning the war on COVID-19 first and paying off debts later.

In contrast to the Americans, generously spending money, the € 750 billion European Recovery Fund, according to the ECB, will lead to a more than modest 1.5% expansion of the euro-area GDP.
Weekly EURUSD trading plan
Therefore, the economic growth gap and different paces of vaccinations in Europe and the USA will continue pressing down the EURUSD in the short run. If the price breaks out the support at 1.208, it could slide down towards 1.204, 1.199, and 1.195.
For more information follow the link to the website of the LiteForex
https://www.liteforex.com/blog/analysts-opinions/euro-declares-war-forecast-as-of-29012021/?uid=285861726&cid=79634
Dynamics of EURUSD and trade-weighted euro

The Fed failed mission. EURUSD forecast as of 28.01.2021
To convince investors in the continuous QE, the Fed chair should have surprised them. Let us discuss the markets’ reaction to Powell’s speech and make up a EURUSD trading plan.

Weekly US dollar fundamental forecast
The economy, like viruses, mutates. Through innovation, the global economy adjusts to new conditions. The problem is that viruses mutate faster. The emergence of new COVID-19 variants in Britain, Brazil, and South Africa has seriously scared the financial markets. Can existing vaccines handle the coronavirus variants? Will humanity need another vaccination campaign? How long will it take to develop new vaccines? In addition to the vaccine supply problems, such ideas, gloomy comments by Jerome Powell, and the ECB dovish tone dropped EURUSD below the bottom of figure 21.

The euro dropped because of the ECB officials’ speeches. The European Central Bank, which, according to Bloomberg source familiar with the matter, at the meeting on January 21, decided it was necessary to shake the markets. Investors stopped pricing the possible rate cut in the financial instruments, which supported the EURUSD bulls. Christine Lagarde and her colleagues decided to resort to verbal interventions. Klaas Knot's statement that the ECB has the opportunity to lower the deposit rate from the current -0.5% made the markets remember this scenario and triggered a wave of euro sales. The president of the central bank of the Netherlands noted the Governing Council has investigated the effective lower bound for interest rates but has not yet found it. According to a recent ECB analysis, the interest rate of -1% will do the economy more harm than good
The ECB’s intention to shake financial markets is understandable. The euro-area economy has had a bad start in 2021. According to the IMF forecasts, the Eurozone's growth will recover up to the pre-crisis levels by late 2022. For comparison, the size of China's economy is already larger than in 2019, and the US growth will return to the trend in late 2021.
Unlike the European Central Bank, the Fed aimed at calming down the financial markets. After comments from individual FOMC officials, investors began to worry about a possible repeat of the 2013 taper tantrum. Has Jerome Powell reassured investors? Looking at the worst daily S&P 500 crash since October, he has failed. The Fed Chairman noted that it is too early to suggest pulling back on the QE, and the central bank will make sure to warn about slow and gradual scaling down of the asset purchases in advance. The problem is that Powell had to add a gloomy tint to the description of the US economic performance to convince investors that the central bank will not change the monetary policy for a long time. Therefore, the Fed’s post-meeting statement scared investors.

Weekly EURUSD trading plan
By and large, three divergences are supporting the EURUSD bears. They are the divergence in monetary policies (the Fed remains passive, the ECB talks about cutting rates), economic growth rates, and vaccination speed. Therefore, I expect the pair to continue correction down towards 1.204, 1.199 and 1.195. A reason to enter short-term sell trades will be a successful test of the support at 1.208.
For more information follow the link to the website of the LiteForex
https://www.liteforex.com/blog/analysts-opinions/the-fed-failed-mission-eurusd-forecast-as-of-28012021/?uid=285861726&cid=79634
Dynamics of the market expectations for the ECB rate changes

Dollar will spoil the party. Forecast for 27.01.2021
The FOMC's first meeting in 2021 is an important event for financial markets. However, the Fed’s meeting will hardly change investors’ sentiment. Let us discuss the Forex outlook and make up a EURUSD trading plan.

Fundamental US dollar forecast for today
Jerome Powell is trying to convince the financial markets that the Fed will not take away the punch bowl just when the party gets going. However, different vaccination paces and the growth-gap between the US and euro-area economies suggest that the EURUSD bulls should not expect the euro rally to be as fast as it was in November-December. The IMF expects the US and China’s economies to exceed the forecasts made for 2022 before the pandemic by 1.5% by the end of next year. Some European economies will only be able to recover to pre-crisis levels in 2023.

In 1955, William McChesney Martin, then chairman of the US Federal Reserve, noted that the central bank’s attempt to raise interest rates too early to slow down inflation looks like taking away the punch bowl just when the party gets going. Jerome Powell does not want to repeat the mistakes of the former Fed’s chairs. For example, Ben Bernanke crashed financial markets in 2013, saying that it was the right time to start tapering the bond purchases. In early January, several FOMC officials talked about pulling back on the asset purchase program, which supported the US dollar. Powell aims now to dissuade investors from this idea.

However, 37% of Bloomberg experts believe that the Fed should start winding down the QE as early as 2021. Such expectations are one of the key drivers of the greenback strengthening.
Furthermore, the US dollar has more benefits. They are a potential escalation of the US-China trade battle, divergence in the paces of vaccination and economic recovery in the US and the euro area. Although the upward revising of the forecasts for the global GDP in 2020 from -4.4% to -3.5% and in 2021 from +5.2% to 5.5% by the IMF is good news for the EURUSD bulls, it is necessary to understand what will drive the global economy. The leaders should be the USA and China, while the euro-area economies should be lagging behind.
I do not believe the above factors are the ultimate benefits for the greenback. The US dollar should benefit from the US-China battle escalation, but the greenback could weaken if the global GDP rebounds because of its safe-haven status. Such a scenario is more likely to work out in the medium term. In the short run, the EURUSD trend depends on the vaccination speed.

With this regard, the situation suggests the euro should be corrected down. Pfizer said it is ready to ship 200 million doses to the US by the end of May, two months earlier than initially estimated. On the contrary, the vaccine's provision to the European Union is being delayed due to problems with the manufacturer's plant in Belgium. AstraZeneca said it would ship substantially fewer doses to Europe than it had promised.

EURUSD trading plan for today
I believe Jerome Powell’s dovish stance could push the EURUSD up above the bottom of figure 22. However, investors should soon realize that there won’t be such a rally as it was in November-December and start selling the euro. It will be relevant to enter short-term sell trades if the price fails to test the resistances at 1.221 and 1.2245.
For more information follow the link to the website of the LiteForex
https://www.liteforex.com/blog/analysts-opinions/dollar-will-spoil-the-party-forecast-for-27012021/?uid=285861726&cid=79634
Forecasts for the time of US QE slowing

Pound: The vaccine changes rules of game. Forecast as of 26.01.2021
Investors prefer to buy those countries' currencies that are actively fighting COVID-19, including with the help of vaccines. Let's discuss how the vaccination campaign's speed will affect the EURGBP and GBPUSD prices and make up a trading plan.

Monthly pound fundamental forecast
Traders love divergences. In technical analysis, the price chart's divergence with the MACD indicator is used in the well-known Elder Triple Screen Trading System. In fundamental research, divergences in central banks’ monetary policies and economic growth rates have served their fans for decades. Due to the pandemic, new strategies are emerging in the Forex market, and trading divergence in vaccination rates is gaining popularity.

Britain is considered to be one of the most COVID-19 affected countries. Due to the impressive share of the service sector as a whole (over 80%) and such spheres as recreation, culture, restaurants, and hotels (13%), in particular, in the UK's GDP, the UK economy faced the most destructive recession in the last three centuries. As a result, the country slipped into the last place among the G7 countries. It is all the more surprising to see the GBPUSD prices near the highs since April 2018 and the EURGBP prices near the 10-month bottom.

The vaccine changes the rules of the game. The currencies of the most COVID-19 affected countries that have a clear plan for overcoming the crisis are beginning to enjoy increased demand, and sterling has something to offer investors in this regard. At the end of January, 10% of Britain's population was inoculated which is five times more than in the European Union. Divergence in vaccination rates supports the EURGBP bears.
The EU is facing difficulties such as a delay in the supply of the AstraZeneca vaccine and Pfizer/BioNTech's intention to reduce its product offer outside the US. As a result, the vaccination campaign slows down, and the euro suffers. The surges of EURGBP are associated with weak statistics on retail sales, purchasing managers' index, and UK employment. The British economy is depressed, but this is a well-known fact. To predict exchange rates, you need to be able to predict the future. The belief that most of the UK population will receive the vaccine by summer allows Aberdeen Standard Investments to expect that the pound will rise by 20% against the euro.

I also believe that the primary beneficiaries of the victory over the pandemic will be the currencies of those countries that will eradicate COVID-19 first. Sterling will benefit from the booming economy following its release from the lockdown. Due to fiscal stimulus, the UK personal savings rate is near historic highs, and once people start spending that money, GDP will show strong growth.

As for the GBPUSD, despite the potential development of the correction in the short term, the growth of inflationary expectations in the US, measured by the break-even level, will push the USD index down.
EURGBP and GBPUSD trading plan for a month
In my opinion, after the release of disappointing data on the British economy, EURGBP price growth should be used for selling in the direction of 0.88, and rebounds from supports at 1.3565, 1.352, 1.349 for buying GBPUSD.
For more information follow the link to the website of the LiteForex
https://www.liteforex.com/blog/analysts-opinions/pound-the-vaccine-changes-rules-of-game-forecast-as-of-26012021/?uid=285861726&cid=79634
Dynamics of EURGBP and vaccination rate

Euro has a compass. Forecast as of 22.01.2021
If you do not want to lose being in a losing position, you should create confusion. It is difficult to discourage investors who are willing to buy the EURUSD. The best way to press down the euro is to address uncertainty. Let us discuss the Forex outlook and make up a trading plan.

Weekly euro fundamental forecast
Christine Lagarde failed to drop the euro, but she didn’t let the single European currency grow, which could be recognized as the ECB success under the current conditions. Although the Governing Council admitted that concerns about the rapid strengthening of the euro have eased, and the euro-area bond yields increased, the EURUSD bulls failed to draw the price above figure 22 bottom. The reason is the confusion created by Lagarde.

What is good, what is bad. At a press conference shortly after the policy announcement, Lagarde spoke about both positive and negative aspects of the development of the world and European economies. As positive sides, Lagarde enumerated the beginning of vaccination, the Brexit deal, the European Rescue Fund, a decrease in political uncertainty in the United States, and the success of the euro-area manufacturing. The negative points are the pandemic and lockdowns in the euro-area countries, the likely double-dip recession, and stubbornly low inflation.

The Governing Council stands ready to adjust the pandemic asset purchase program but doesn’t say how exactly. Most of the uncertainty must result from Christine Lagarde's announcement that PEPP will be scaled up or down based on market data, including terms and conditions of bank lending and sovereign and corporate bond rates. It would seem that the ECB suggests yield targeting following the example of the central banks of Japan and Australia. Still, unlike them, the ECB uses not one but several criteria. The central bank doesn’t explain how exactly it should adjust its asset purchases. The market is confused, which is traditionally supports safe-haven assets. That is why the EURUSD could not rise high.

Christine Lagarde noted that financial conditions are the compass, and inflation is the anchor. At the same time, the fact that the ECB asset purchases under the PEPP are scaling down supports the euro.
ECB has given way to the Fed, whose meeting will highlight the last week of January. The Federal Reserve must be satisfied with the increase of inflation expectations suggested by different market indicators, including bond breakeven inflation rates, interest rate swaps, and hedging costs. But isn’t it an illusion? According to the Baupost Group, the US central bank and government have convinced investors that the risk has simply disappeared. As a result, the market cannot fulfill its function of determining prices.
In fact, the growth of the US stock indexes during the COVID-19 pandemic and GDP downturn is not natural. The higher the S&P 500 grow, the more likely the correction is to start. If the US equities go down, the euro will be pressed down.

Weekly EURUSD trading plan
If the euro-area PMI data are strong in January, it will signal that the euro-area economy has adopted to the pandemic. In this case, the EURUSD could rise above 1.22. Hold up the longs entered at 1.208 and 1.2125, but prepare for the violent price swings. As I noted earlier, the euro rally won’t be easy.
For more information follow the link to the website of the LiteForex
https://www.liteforex.com/blog/analysts-opinions/euro-has-a-compass-forecast-as-of-22012021/?uid=285861726&cid=79634
Dynamics of ECB asset purchases

Euro reads between the lines. Forecast for 21.01.2021
Investors do not expect anything new from the European Central Bank. This fact, as well as the return of the dollar bears and pleasant surprises from the euro-area economy, could encourage the EURUSD bulls to go ahead. Let us discuss the Forex outlook and make up a trading plan.

Fundamental Euro forecast today
People, who can earn money, can read between the lines. The US new administration and Joe Biden may suggest an unwillingness to weaken the dollar. However, the very fact of Janet Yellen's appointment to theTreasury Secretary gives the green light to the greenback sellers. At the press conference following the ECB's January meeting, Christine Lagarde may repeat the mantra that the central bank is closely monitoring the euro exchange rate. However, the repetition of the previous wording will most likely contribute to the EURUSD growth. It is simply because the ECB, after the pair’s correction, has fewer reasons to worry about the euro’s appreciation than in December.
The S&P 500 bulls correctly interpreted Joe Biden’s call for national unity. The new US president is preparing Congress to adopt the new $1.9 trillion fiscal stimulus package. In addition to the positive corporative reporting, this fact allowed the US stock index to hit a new all-time high. According to FactSet, as of January 20, actual earnings data were better than expected by 88% of companies reporting. Besides, investors believe in the rebound of the US economy in the second quarter, so the US stock market's bullish sentiment is natural.

History knows only a few examples of the S&P 500 fall during economic booms. In 1946, after a short downturn, investors feared that the economy would repeat the recession of the 1930s and sold stocks. In 1980, during a short-term recovery in the double-dip recession, the stock index fell as the Fed tried to mitigate excessive inflation growth. A drop in the S&P 500 during a time of GDP growth is rare. So, investors naturally stick to a strategy of buying the stocks on the corrections and selling the dollar on the price rise. The EURUSD current correction seems to be just the rebalancing of the large investors’ positions.

The ECB passive attitude will support the recovery of the euro uptrend. Investors don’t expect anything new from the central bank, so they should focus on Christine Lagarde’s press conference. Not long ago, the ECB president supported the central bank’s forecast for a 3.9% growth of the euro-area GDP in 2021 following a decline by 7.3%. She said that it is too early to discuss the ECB monetary policy tightening, and the ECB is monitoring the euro’s exchange rate. She is likely to repeat the same on January 21. The Central Bank has nothing to surprise investors, and the fact that the EURUSD correction reduces the need for verbal intervention, on the contrary, may strengthen the euro.
EURUSD trading plan for today
I do not think the ECB will expand the QE. The euro-area economy adjusts to the pandemic and improves its performance. The US dollar bears go ahead, and the EURUSD bulls could be only discouraged by slow vaccination. The EU, where 1.4% of the population have been inoculated, is behind the UK (7.1%) and USA (5%). However, the progress in the vaccination campaign supports the euro. If the euro breaks out the resistance at $1.215, it can be the reason to buy.
For more information follow the link to the website of the LiteForex
https://www.liteforex.com/blog/analysts-opinions/euro-reads-between-the-lines-forecast-for-21012021/?uid=285861726&cid=79634
Dynamics of USD index

Dollar listens to a teacher. Forecast as of 20.01.2021
Yellen’s speech in the US Congress met investors' expectations. Stock bulls hope for an additional fiscal stimulus, and dollar bears believe the Treasury will not interfere. Where will the EURUSD go? Let us discuss the Forex outlook and make up a EURUSD trading plan.

Monthly US dollar fundamental forecast
When the verdict is not as strict as expected, you feel relief. Markets expected Janet Yellen to voice her adherence to a strong dollar policy. However, Yellen says the US doesn’t seek a weaker dollar to gain a competitive advantage. The EURUSD bears are discouraged as the Treasury secretary nominee says the Treasury should oppose attempts by other countries to manipulate currency values artificially. Will the ECB resort to verbal interventions after that?

Markets must have missed the rural teacher. This is how investors once called Janet Yellen for her ability to sort things out. Yellen satisfied the market with her speech in Congress. US stocks bulls hope for an additional fiscal stimulus of $1.9 trillion; US dollar bears believe that the Treasury won’t oppose the dollar weakening, suggesting the value of the US dollar should be determined by markets. At the same time, Yellen expressed her opposition to the euro weakening.

If the European Central Bank wants to press the EURUSD down, it should outplay the Fed. Yes, Christine Lagarde and her fellow central bankers were aggressive during the recession, but they were hardly more aggressive than the Fed. The Governing Council can’t affect foreign exchange rates now. The QE expansion won’t accelerate inflation and will face serious opposition from the hawks. The transition to a yield targeting policy will strengthen the euro by reducing the volume of asset purchases. By the way, according to the Bloomberg source familiar with the matter, the ECB is already doing something similar, narrowing the yield spreads between the euro-area government bonds. Christine Lagarde will not dare to speak about it aloud. There are the Japanese and Australian experiences with the subsequent growth of the yen and "Aussie" rates.
As long as most investors expect the dollar to weaken, the ECB's failure to cut European bond yields suggests the euro should be growing in value. There is another problem. The EURUSD bulls bet on entirely different conditions.

Remember, the bullish euro projections for 2021 were based on the expected victory over the pandemic, exit from the lockdowns, and a rapid rebound of the euro-area economy. However, the vaccination progresses extremely slowly in Europe. About 4% of people received the vaccination in the US, while about 1% of people were inoculated in Germany.
Monthly EURUSD trading plan
The lockdown in the euro area could last longer than expected. If so, the euro-area GDP recovery won’t be that fast, and the EURUSD won’t reach level 1.25 soon. Of course, the rally might continue amid the euphoria about the pair consolidation above 1.208, followed by a successful test of the resistance at 1.215. However, I believe the euro-dollar should enter a short-term consolidation range of 1.208-1.238. If the bulls fail to break out the resistance at 1.215, the consolidation range will move lower.
For more information follow the link to the website of the LiteForex
https://www.liteforex.com/blog/analysts-opinions/dollar-listens-to-a-teacher-forecast-as-of-20012021/?uid=285861726&cid=79634
Dynamics of bond yields and spread between euro-area bond yields

Cunning Aussie. Forecast as of 19.01.2021
By 2028, the American economy will be bypassed by China. This fact and the PRC's insatiable demand for iron ore will favor the AUUSD bulls for many years to come. Let us discuss the Forex outlook and make up a trading plan.

Fundamental Australian Dollar forecast for six months
Vaccine, incentives, and China are the recipe for a nearly 42% rally in AUDUSD from March lows to January highs. Looking at the astonishing rise of the Australian dollar, one may begin to doubt its continuation. But what if none of the investors will no longer buy, global risk appetite will stop growing so fast? Will Joe Biden's inauguration be a signal for profit-taking on US stock indices? Will China's GDP accelerate in 2021? Finally, can vaccine continue to push the S&P 500 up?

Investors cannot expect the same scale of monetary and fiscal stimulus as in 2020. At best, the Fed will continue to buy assets for $120 billion a month until the end of the year, and the factor of Joe Biden's $1.9 trillion aid package is already included in the prices of US stock indices. According to Nordea Markets, the number of positive news about vaccines has approached its extreme value and will no longer provide the previous support for the S&P 500. At least for a while. This is fraught with increased turbulence in the stock market and the strengthening of the greenback.
Will China's GDP Accelerate in 2021? The World Bank thinks so. According to its forecasts, China's economy will expand by 8% this year and exceed the 2019 level by 10%. Beijing's voracious demand for steel is fueling the rise in iron ore futures, which is a crucial component of Australian exports even as the US dollar strengthens. At the same time, in 2020, China fulfilled only 52% of its obligations to purchase US goods. If Joe Biden touches on this topic during the inauguration, the yuan's fall will create problems for the AUDUSD bulls.

Let's not forget about the potential expansion of the US Treasury bond issue due to the need to finance $1.9 trillion in fiscal stimulus. This action could provoke further growth in treasury yields and a correction of dollar pairs on Forex.

Thus, in the short term, the Australian dollar has a lot of risks. Nevertheless, in the medium and long term investment, it will probably be able to recoup. History shows that crises worked in China's favor. In 2001, when Beijing joined the WTO, its economy was only 13% of America's size. In 2009 this figure increased to 35%, in 2020 to 71%. By 2028, the American economy will be bypassed by China. Growth in its GDP and Aussie neutral positioning serves as bullish factors for AUDUSD.
AUDUSD trading plan for six months
In my opinion, the acceleration of the vaccination process and the more vigorous growth of the global economy than currently expected will help restore the uptrend in emerging markets' currencies and the Australian dollar. However, the AUDUSD correction may continue shortly. So much, the better. The fall of the AUDUSD pair to the supports at 0.763 and 0.759 will make it possible to buy the Australian dollar at a lower price. It is still relevant to open AUDUSD long positions on the price rise with the targets at 0.79 and 0.82.
For more information follow the link to the website of the LiteForex
https://www.liteforex.com/blog/analysts-opinions/cunning-aussie-forecast-as-of-19012021/?uid=285861726&cid=79634
S&P 500 and virus/vaccines news dynamics

How long will the EURUSD be falling? Forecast as of 18.01.2021
What will signal the end of the EURUSD correction? The ECB meeting? Joe Biden’s inauguration? The Fed meeting? Each of these events could discourage euro bears. Let us discuss the Forex outlook and make up a trading plan.

Weekly Euro fundamental forecast
The US stock market is to face turmoil amid the US corporate earnings reporting season. The euro-area economy is likely to slide into a double-dip recession, and the ECB could discuss a possible monetary stimulus expansion at the meeting on January 21. The new Treasury secretary Janet Yellen will make clear the U.S. doesn’t seek a weaker dollar. The EURUSD bulls are discouraged, and the pair featured the worst weekly drop since October. After all, there is a good chance to buy when everyone else is selling.

In the week ended January 12, the US hedge funds boosted their dollar shorts up to the highest levels since 2018. Of course, many former EURUSD bulls, scared by the correction, turned into bears. However, Goldman Sachs still suggests that the dollar is overvalued, the Treasury nominal and real yields are low, and the global GDP should rapidly recover this year. All these factors will press the US dollar.
Of course, when the consensus forecast is clear, and the greenback net shorts are so high, the EURUSD correction must start. Nonetheless, the majority is not always correct. To resume the uptrend, the pair should first get rid of the ballast. The current information environment encourages doubting traders to exit longs. When they sell, somebody buys, don’t they?

In my opinion, the leading risk factor for the euro in the next week or two may be the drawdown of the S&P 500. In terms of P/E, the stock index is overvalued (22.65 with an average of 17.84 over the past 5 years), and the US corporate earnings reporting season will force some bulls to exit the longs. Janet Yellen's speech on January 19 should also be associated with the White House's desire to prevent turmoil in the US stock market. If the Treasury nominee abandoned the strong dollar policy, the panic would push the greenback up and crash the S&P 500.

I do not think the ECB will discuss the QE expansion amid the euro-area double-dip recession. Yes, the ECB officials used to hint at an additional monetary stimulus if the situation deteriorates and there are new lockdowns. However, the bond purchases' monthly pace decreases, and Bloomberg experts expect the euro-area GDP to rapidly rebound in the second quarter. Furthermore, Christine Lagarde, ahead of the ECB January meeting, says it is not the right time to discuss the tightening (!) of the monetary policy yet.

Weekly EURUSD trading plan
Obviously, the EURUSD correction is still likely to develop. I am interested in the moment when the major currency pair will stop falling. Will it be the ECB meeting or the Fed meeting? The euro may resume rising after Joe Biden’s inauguration. The market should return to the normal state after the president-elect assumes the duties of the position. In this case, the US dollar will lose one of its primary benefits – uncertainty caused by Trump. I won’t recommend catching falling daggers, so I suggest entering buy trades only after the euro closes above the key resistance levels of $1.208, $1.2125, and $1.215.
For more information follow the link to the website of the LiteForex
https://www.liteforex.com/blog/analysts-opinions/how-long-will-the-eurusd-be-falling-forecast-as-of-18012021/?uid=285861726&cid=79634
Dynamics of USD and dollar speculative positions

Euro is up to the old tricks. Forecast as of 14.01.2021
Any trend needs a correction. The EURUSD bears are drawing the price down. However, the correction shouldn’t be deep unless there are problems with vaccination. Let us discuss the Forex outlook and make up a trading plan.

Weekly Euro fundamental forecast
The talks that the fiscal stimulus under Joe Biden will be $2 trillion turned the Treasury yields up. The US bond market rates are going up, the dollar is strengthening, and the EURUSD is again back to the key support 1.2125-1.2145. If the price breaks out the support, the correction should continue. The ECB again resorts to verbal interventions. Goldman Sachs recommends its clients to use the greenback to hedge against the drop of the S&P 500, which now looks overvalued. The stock options are too expensive, and the currency market can achieve the same results.

The Treasuries auctions have been over, the demand is satisfied, and the bond yields should be rolling down. The yields had been falling until Joe Biden's advisers share details of the stimulus plan with their allies in Congress. The president-elect did not throw words to the wind, declaring trillions of dollars in aid to the US economy. In the document, which is to be presented to the general public on January 14, most likely, the amount of $ 2 trillion will appear. It means investors should expect more bonds to be issued, and the capital should flow from the secondary bond market to the primary market. If so, the bond yields will grow, and the greenback will strengthen.

The US bond yields are rising in January much faster than their German peers, pressing the EURUSD down. However, the rising inflation expectations are followed by an increase in the expected euro-area inflation. The hope for the rebound of the US economy, which will support the global GDP, as well as the euro-area economy, pushed the euro-area inflation expectations up to a level of 1.35%, the highest for more than a year. Will the ECB start monetary normalization soon?
Christine Lagarde doesn’t think so. The ECB president insists on the forecast for the euro-area GDP growth by 3.9% in 2021. However, Lagarde says it is too early to tighten the monetary policy. The central bank monitors the euro-dollar rate, whose growth slows down inflation by reducing import costs.

The ECB's verbal interventions and the central bank’s unwillingness to discuss any monetary tightening measures contrasts with the Fed’s hawkish comments, encouraging the EURUSD bears.

4 out of 18 FOMC members suggested winding down QE in January. In contrast, Fed Vice Chair Richard Clarida and three of his colleagues, including Lael Brainard, do not see the need to pull back on the Fed’s bond purchases. Investors expect Jerome Powell's opinion, which will likely be announced on January 14th.

Weekly EURUSD trading plan
In my opinion, Powell’s dovish stance will not allow the EURUSD bears to draw the price below the support levels of 1.208 and 1.204. A deeper correction will develop if there are problems with the COVID-19 vaccination, which will question the forecast for the global GDP rebound in the second quarter. Until it happens, I suggest opening euro medium-term purchases on the price decline.
For more information follow the link to the website of the LiteForex
https://www.liteforex.com/blog/analysts-opinions/euro-is-up-to-the-old-tricks-forecast-as-of-14012021/?uid=285861726&cid=79634
Dynamics of bond yields in USA and Germany

EURUSD: who blinks first? Forecast as of 13.01.2021
Weekly Euro fundamental forecast
The dollar lost the growth driver and started falling. After completing auctions for US Treasury bonds for $ 38 billion, Treasury yields went down, and the EURUSD price went up above the bottom of figure 22. As I expected, the rise of the US bond market rates, based on the greater offer amid the fiscal stimulus expansion, has been temporary. Everything goes back to the norm.
Perhaps the most remarkable feature of the USD rally in January has been the rejection of individual banks and investment companies' previous bearish views. As I mentioned earlier, Morgan Stanley and other major players have not passed the strength test. Deutsche Bank has announced it intends to exit greenback short trades as the fiscal stimulus has accelerated the US economy and will ease pressure on the Fed to keep the federal funds rate artificially low. JP Morgan noted that one of the main drivers of the US dollar weakening was the confidence that the Fed will long tolerate high inflation. Investors are less confident now.

Therefore, not only the ordinary traders got nervous, but experienced Forex analysts also did. So, do not be upset about the unsuccessful sales of EURUSD. I believe the euro-dollar will reach the level of 1.25-1.27 in the first half of 2021, although its rally won’t be so fast and easy as it was in November-December. The reasons for a potential short-term consolidation are both in the euro-area economy's weakness and the increased volatility of the US stock indexes.

The second wave of COVID-19 and the lockdowns in Europe encourage experts to revise their predictions. Bloomberg suggests the euro-area GDP should contract by 4.1% in the first quarter, although it was earlier suggested that the indicator will grow by 1.3%. JP Morgan's forecasts for the January-March period (current is -1%, previous is +2%) and UBS (-0.4% and +2.4%) are less pessimistic, but all analysts expect the recession to continues. This fact increases the pressure on the ECB in terms of the monetary stimulus expansion, which could weaken the euro ahead of the Governing Council meeting on January 21.
Furthermore, excessively overestimated fundamental assessments and higher political risks due to a potential impeachment of Donald Trump and a delay of additional fiscal stimulus by trillions of dollars could start the consolidation of the S&P 500. Nonetheless, effective vaccinations will support the euro-area economy in the second and third quarters (up 4.8% and 3.1% according to Bloomberg estimates) and increase global risk appetite, which will continue pressing down the US dollar.

Weekly EURUSD trading plan
By and large, the EURUSD medium-term outlook remains bullish. However, the pair is likely to start a short-term consolidation in the range of 1.208-1.238. I recommend holding up the long trades entered at the level of 1.2145.
For more information follow the link to the website of the LiteForex
https://www.liteforex.com/blog/analysts-opinions/eurusd-who-blinks-first-forecast-as-of-13012021/?uid=285861726&cid=79634
Dynamics of USD and 10-year Treasury yield

Dollar follows Treasuries. Forecast of 12.01.2021
Before you start rising, you need to get rid of everything, keeping you down, the ballast. The EURUSD correction has scared off some former bulls. What’s next? Let us discuss the Forex outlook and make up a EURUSD trading plan.

Weekly US dollar fundamental forecast
The dollar has become oversold, so, naturally, it should rise for some time. The rally of the Treasury yields encouraged speculators to exit short trades on the greenback, which have been expanding over the past few weeks and reached multi-year highs. Emerging markets currencies and the euro have suffered the most from the USD rebound. The EURUSD correction has questioned the former consensus forecast and even turned yesterday’s bulls into bears.

Morgan Stanley, which suggested at the end of 2020 that the US dollar should be 10% down over the next twelve months, now says the greenback has reached the bottom. New fiscal stimulus and the Fed’s discussion of monetary normalization, which could start already in June, will support the Treasury yield growth. I must admit the arguments are quite convincing: in my December euro price prediction, I noted that the EURUSD uptrend could turn down amid the talks about the federal funds rate hike, but I expected it to happen in late 2021. I still keep my point of view, the current euro’s drawdown is a normal correction, the pair should exceed the January highs before the uptrend reverses.

After Joe Biden promised trillions of dollars of additional assistance to the economy, the Treasury yields are rallying up. The rates on 10-year Treasuries have reached 1.158%, the highest value since February. Besides, Citi anticipates that the new fiscal stimulus will be $600 billion, Goldman Sachs expects $750 billion, and BofA Merrill Lynch - $1 trillion.
The situation in the US bond market doesn’t yet concern the Fed. Conversely, Atlanta Fed President Raphael Bostic said that if the US economy recovers quickly, the central bank will begin to roll back QE as early as 2021. Dallas Federal Reserve President Robert Kaplan says he expects the US economic growth to be strong enough to allow the Fed to consider pulling back on the asset purchase program. The money markets suggest the Fed should hike the interest rate twice by the end of 2023. Not long ago, there were doubts even about a single rate hike during the suggested period.

Weekly EURUSD trading plan
I think the Fed is not concerned about the rise of the Treasury nominal yield, as the real yield is still low. The 10-year yield should be up to 1.6-1.8% to scare the Fed and the markets, which is yet unlikely. On the contrary, the idea of Trump’s impeachment could delay Congress’s consideration of Joe Biden’s stimulus offer, discourage the bears on the US Treasuries, and suspend the EURUSD correction. To buy the euro-dollar, we need additional signals. The first buy signal will be sent when the euro sellers fail to draw the price below the support zone of $1.212-$1.2145. If the price goes below the support zone, we shall pick up the rebound and buy the euro at a low price around $1.208 and $1.204.
For more information follow the link to the website of the LiteForex
https://www.liteforex.com/blog/analysts-opinions/dollar-follows-treasuries-forecast-of-12012021/?uid=285861726&cid=79634
Projections for new stimulus package

Euro is to pass stability test. Forecast as of 11.01.2021
Any trend needs a correction. Bloomberg experts suggest the EURUSD reach level 1.25 in 2021, but it won’t happen in January, of course. Let us discuss the market outlook and make up a trading plan.

Weekly Euro fundamental forecast
Stability test. That is how the current market situation looks like. As I expected, the US weak jobs report opened the door to the EURUSD correction. The euro bulls are so worried about the drop in the US nonfarm payrolls by 140,000 that allowed the major currency pair to go down to the middle of figure 21. There is a clear divergence between the euro-dollar and the US stock indexes, which looks strange as the S&P 500 and the EURUSD were moving in sync during most of 2020.

The euro bulls are scared, and as the price is going lower, the fear is growing. Most large banks and investment companies, including Goldman Sachs, BofA Merrill Lynch, Citi, Standard Chartered unanimously claim that the dollar assets will lose their appeal due to the inflation growth. The Fed will have to hike the federal funds rate to prevent it, but it won’t do anything, so the greenback should weaken in 2021. As a result, the EURUSD should rise to 1.25. However, nobody says it will happen in January. The market can’t be growing all the time, and it needs a correction.

Yes, in 2020, the US economy lost 9.4 million jobs. This is the worst result since the beginning of accounting in 1939. However, everything will radically change in 2021! According to IHS Markit, US employment will increase by 6.7 million new jobs. Oxford Economics expects +5.8 million new jobs, University of Michigan - +5.3 million. In any case, it will be more than in the record employment rise in 1946 (+4.3 million).
The recovery of the labor market is a sign of the US economic rebound. If so, the US economy, along with the Chinese one, will push the global GDP up, increasing the global risk appetite, and encouraging sell-offs of safe-havens. The current EURUSD correction is a good chance to enter long-term purchases at reasonable prices.

What is happening in the market? Why are the S&P 500 and the EURUSD going in the opposite directions? The stock index is rising amid the expected additional fiscal stimulus. Following a weak jobs report for December, Joe Biden promised the Americans to spare trillions of dollars on a new aid package. This results in the growth of equities and Treasury yields amid the expectations of new loans. However, suppose the Treasury yield rally continues. In that case, it will press down both the S&P 500 (the index will start to look overvalued given the income discounted model) and the rate-sensitive sectors of the US economy.

Weekly EURUSD trading plan
The above scenario is not what the Fed wants. I think the central bank’s officials should sound dovish. Federal Reserve Vice Chairman Richard Clarida says he doesn’t see a QE pullback anytime this year even though he expects growth to accelerate. I expect other Fed officials to continue their dovish stance and the Treasury yield to fall. If so, buy the EURUSD at the breakout of the resistances at 1.2225, 1.2285, and 1.2305.

For more information follow the link to the website of the LiteForex
https://www.liteforex.com/blog/analysts-opinions/euro-is-to-pass-stability-test-forecast-as-of-11012021/?uid=285861726&cid=79634
Dynamics of US employment

Dollar is clutching at straws. Forecast as of 08.01.2021
Weekly US dollar fundamental forecast
The Fed’s hawkish stance and the surge of the Treasury yield made EURUSD bulls nervous. Speculators have been building up US dollar shorts for the 40th week in a row, and the bullish factors for the greenback encourage the sellers to exit trades. Furthermore, Bloomberg experts expect a weak growth of the US nonfarm payrolls by 50,000. A quarter of the analysts polled suggest the indicator should enter a negative area.

A ‘blue wave’ allowed the S&P 500 to hit new all-time highs and supported the Treasury yield growth. The rates on 10-year Treasuries have reached 1.1% for the first time since February, have featured the best four-day rally since the presidential election. The yield is growing too fast. On the one hand, it makes the US assets more appealing; on the other hand, it sets back carry traders and emerging markets’ currencies. According to Reuters experts, the EM currencies should rally in 2021. 47 out of 57 analysts expect the EM currencies to perform better than the advanced economies’ currencies.
35 out of 63 economists, which about 55%, predict the dollar downtrend should continue for more than a year. The median forecast for the EURUSD is 1.25 at the end of 2021.

The greenback is supported by the Treasury yield growth, which resulted from the growing chance of an extra fiscal stimulus provided by Joe Biden’s administration. The stimulus will increase the volume of bonds issue and lead to the capital outflow from the secondary market to the initial one. The US dollar grew amid the hawkish tone of the Fed’s officials. Richmond Fed President Thomas Barkin says the Treasury yield increase indicates that investors expect the Fed to hike the interest rates. Philadelphia Fed President Patrick Harker says the Fed may begin paring bond purchases in late 2021.

I don’t think the EURUSD bears should expect the US bond market rates to continue the rally. History hasn’t proven that an increase in bond issue volumes leads to a rise in yields. In contrast, the US debt to GDP ratio has hit the level that was last since during the Second World War, and rates are at near-record lows. The US government and the Fed remember very well that the debt must be paid, and the lower the yield, the cheaper it will cost to service them.

Weekly EURUSD trading plan
Therefore, I do not think that EURUSD bears will develop a deep correction unless there are new drivers. If the US jobs report for December is weak, the euro-dollar will go down to 1.218 or 1.2145. However, it is likely to encourage the buyers to buy at a better price, as the target at 1.25 is still relevant.
For more information follow the link to the website of the LiteForex
https://www.liteforex.com/blog/analysts-opinions/dollar-is-clutching-at-straws-forecast-as-of-08012021/?uid=285861726&cid=79634
Dynamics of US Treasury yield

Run, Dollar, run! Forecast as of 06.01.2021
While Georgia counts election votes, the EURUSD traders forgot about the pandemic. Regardless of who wins, the S&P 500 should continue the rally, and global risk appetite will rise. How will the dollar react? Let us discuss the Forex outlook and make up a EURUSD trading plan.

Quarterly US dollar fundamental forecast
Do not make hasty decisions! The EURUSD pair is trading around level 1.23 but doesn’t rise higher, expecting Georgia's voting results. The Republicans’ victory will restore the status quo supporting the growth of large US tech companies, which are now concerned about tightening tax laws under Joe Biden. The triumph of Democrats will increase the likelihood of additional fiscal stimulus, a reflationary environment, supporting the stock indexes. The S&P 500 should continue rally anyway. If so, the US dollar bulls will step back.

Donald Trump is making weak attempts to stay in power, which results in a division of opinion among Republicans. Some members of the Republican party believe that Trump will be responsible in case the Elephants lose. Traders realize that Trump’s attempts to overturn the election are groundless so, the greenback will hardly start a correction up. Investors still remember the slogan ‘what is good for Trump is good for the dollar,’ and Trump is in trouble now.

Regardless of Georgia's election results, the US fiscal policy will remain stimulating, and the monetary policy – ultra-easy. Federal Reserve Bank of Chicago President Charles Evans says monetary policy needs to focus on the economy and that Fed officials should turn to regulatory tools if they see any problems in the stock market related to, for example, the risks of financial instability or bubbles. The Federal Reserve is not going to change its stance, and the ‘blue wave’ could push the S&P 500 even higher. The EURUSD bears can do nothing but run.

US politics has distracted investors' attention from the coronavirus for a while. According to the World Bank’s forecasts, if vaccination yields positive results, global GDP will expand by 4% in 2021. If vaccines are not effective, the global economy will grow by 1.6%. The first gauge was lowered by 0.2% compared to the data reported in June, which results from the second COVID-19 wave and associated lockdowns.
The World Bank lowered its forecasts for euro-area GDP in 2021 from 4.5% to 3.6%, the expected US GDP growth is down from 4% to 3.5%. The growth gap is narrowing, which is a bearish factor for the EURUSD in the middle term. The euro rally might end in the first quarter already. The matter is how far the pair will rise before it starts consolidation or a correction.

The uptrend is strong in the meanwhile. The Fed will hardly hike the interest rate before 2024. Neither the status quo in Congress nor a ‘blue wave’ will stop the US stock indexes' rally. Besides, investors are not concerned about an increase in COVID-19 cases or the record number of hospitalizations in the USA. Yes, humankind could face the third and the fourth pandemic waves, but vaccination will eventually help to win the battle with the coronavirus.

Quarterly EURUSD trading plan
I reckon the S&P 500 could hit its all-time highs, and the EURUSD should be up to 1.25-1.27 in the first quarter. It is still relevant to buy the euro versus the US dollar.
For more information follow the link to the website of the LiteForex
https://www.liteforex.com/blog/analysts-opinions/run-dollar-run-forecast-as-of-06012021/?uid=285861726&cid=79634
World Bank’s forecasts

TOP five investment strategies for 2021. Forecast as of 31.12.2020
Betting on the victory over the pandemic, the global economy's rapid growth, and the underestimate, we can find currencies, commodities and stocks that are worth a closer look in 2021.

The article covers the following subjects:

East European currencies
Platinum
Oil
FTSE 100 index
Boeing stock

East European currencies
They believe in the market that the euro's moves in 2021 will be similar to those in 2017. Back then, the EURUSD soared by 17% amid a lower political risk after Emmanuel Macron's victory over French eurosceptics, the eurozone's GDP growing faster than its US peer - for the first time in 10 years -, and Mario Draghi's hints about monetary policy normalization. Today, the pent-up demand effect, the global trade's fast growth, the unity within the EU and ECB President Christine Lagarde's current penchant for hawks let us hope that the major currency pair will continue rallying to at least 1.25-1.27.
When it comes to East European currencies, in 2017 they looked even better than the euro: the Czech koruna rose by 18.6% and the Polish zloty - by 18%. Only the Hungarian forint "dropped the ball", consolidating by as little as 13%. I think history will repeat itself. The currencies of the countries whose exports are mainly targeted on the EU will be in their element. So, I recommend selling USDPLN, USDCZK and USDHUF on retracements.

Platinum
Platinum has been the worst 2020 performer among precious metals. Its cost rose as little as 11% while palladium, gold and silver grew 20%, 25%, and 49%, respectively. Nevertheless, the XPTUSD bulls don't despair and plan to make up for missed profits in 2021. Sixty-two percent of platinum is used in industrial production, with Europe and China accounting for 50% of total demand for autocatalysts. These regions' fast development in the coming year, producers' intention to replace expensive materials with cheaper ones (palladium's cost is 2.2 times higher than platinum's) and transition to clean energy are drawing a bright future for platinum.

World Platinum Investment Council forecasts that the demand for platinum will exceed the supply by record 1.2 million ounces in 2020. There even will be a deficit for the next few years. According to CRU Group, a hydrogen vehicle will require four times more platinum than modern diesel cars.
Oil
Black gold is considered to be an indicator of the global economy's health. Once it improves, oil prices rise. Brent closed the year 2020 with minus 22% and WTI dropped 21%. The International Energy Agency estimates that the pandemic-driven loss in global demand amounts to nearly 10 million b/d. The demand is expected to grow to 96.9 million b/d (+6 million b/d) next year, still remaining below the pre-crisis value of 100 million b/d.

At the end of 2019, North Sea oil was trading at $65-70 a barrel. I think it can return to those levels - not only because of demand, but also because of limited supply. The US is unlikely to return to its record high production rates, while the OPEC and Russia will be careful as an increase in production can scare investors and destabilise the market. My advice will be buying Brent and WTI.

FTSE 100 index
The FTSE 100 index has been underperforming compared to its global peers since 2016 when the referendum on the UK membership was held and resulted in an unexpected Eurosceptics victory. A no-deal Brexit was priced in the UK stocks as a bearish factor. However, the trade deal of the UK and the EU signed at the very last moment has eliminated it.
According to Boris Johnson, the trade deal brought about confidence, which is the most important. The uncertainty, pressing down the UK assets for many years, has eased at last. So, the UK stocks could be booming up in 2021. In 2020, the FTSE 100 has lost about 13% in value. In 2021, the bulls should at least gain back the lost points.

Boeing stock
Boeing has faced severe problems so far. The company was already challenged before 2020. There were crashes of two 737 MAX aircrafts, which killed 346 people. As a result, Boeing was banned from using machines of this type in March 2019. Considering that the 737 MAX orders accounted for about 80% of total demand, this was a disaster for the corporation. In 2020, COVID-19 worsened the situation, and Boeing stock crashed to a seven-year low. So, Boeing has been -33.5% this year, which suggests the stock is now undervalued.

In late December, the Boeing 737 Max was back in service in the US after the ban on this type of jets had been lifted in November. According to Cirium, Boeing plans to make 588 flights on 737 Max in January. The jets are actively utilized in Brazil. Gol Linhas Aereas Inteligentes SA performed 516 flights in December, Grupo Aeromexico SAB - 73. I believe that everything will be fine in the States. I think the Boeing stock should be rising in 2021. Besides, the rapid growth of the world economy and tourism suggests that the Boeing stock price should be up to $335.
For more information follow the link to the website of the LiteForex
https://www.liteforex.com/blog/analysts-opinions/top-five-investment-strategies-for-2021-forecast-as-of-31122020/?uid=285861726&cid=79634
EURUSD's dynamics

Euro remembers alphabet. Forecast as of 30.12.2020
The trends of stock markets and the world’s leading economies have diverted this year. The trajectory of their movement resembled different letters of the English alphabet. How has this affected the EURUSD? Let us discuss and make up a trading plan.

Weekly euro fundamental forecast
In 2020, it has been fashionable to use the English alphabet letters as a market term. At the peak of the recession, the White House insisted on a V-shaped recovery of the US GDP. The Fed, which, along with the ECB and the Bank of Japan, provided $8 trillion in liquidity, the same amount as in eight years since the beginning of the previous crisis in 2008, was more cautious. Jerome Powell and his fellow central bankers suggested a U-shaped recovery trend. Investors discussed W-, L-, Nike-, and even K-shaped recovery. The K-shaped rebound means that some sectors recover faster, others – slower. For example, Nasdaq has added 40% since the beginning of the year, and it has been 90% up from the March lows. These figures are enormous compared to the banking or the UK’s FTSE 100 that has been 12% down in 2020.

In fact, markets and different economies have been following differently shaped recovery trends. The stock indexes preferred a V-shaped trend, and the likely double-dip recession in the euro area (W) didn’t encourage the EURUSD bears. Conversely, at the end of December, the euro reached its highest level against the US dollar for the last more than two years amid the massive sell-offs of the safe-havens. Donald Trump’s defeat at the presidential election in November and the new package of fiscal stimulus and spending of $2.3 trillion have eased the uncertainty and sent the greenback down.

Investors do not worry about the fact that activity in several of the world's largest advanced economies plummeted over the Christmas holidays and restrictions because of COVID-19. They expect the victory over the pandemic in 2021
According to 33 experts polled by Financial Times, the euro-area GDP will expand by 4.3% due to vaccines. The economy will grow at the fastest pace since the introduction of the euro, which, of course, should encourage the EURUSD bulls. Although the median forecast is lower than the IMF’s projections of 5.2%, it is higher than the ECB’s predictions (+3.9%). Individual gauges ranged from + 1.5% to 6%.
The US GDP should be growing faster than the euro-area economy, in the first quarter at least. Nonetheless, it doesn’t discourage the EURUSD bulls. So, the US economy will contribute to the global economic expansion and increase the risk appetite, pressing down safe-haven assets, including the US dollar.

Weekly EURUSD trading plan
Senate Majority Leader Mitch McConnell tied the increase in COVID-19 relief checks from $600 to $2,000, demanded by Trump, to two other measures the president wants - a probe of the November election resultsand a provision scrapping the social media legal protections. In fact, it could override the expansion of the fiscal stimulus. However, investors still believe that the financial aid packaged will be boosted (either under Trump or Biden) and continue buying the EURUSD. As long as the pair is above 1.213, the bulls are controlling the market.
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https://www.liteforex.com/blog/analysts-opinions/euro-remembers-alphabet-forecast-as-of-30122020/?uid=285861726&cid=79634
Dynamics of economic activity