EURUSD: Here’s Why EUR to USD Rally Will Continue – JP Morgan
The EUR to USD (EURUSD) is on an unstoppable bull run. The pair soared to 1.2117 during the Asian session. That’s the highest it has been since April 2018. Also, the pair has jumped by more than 12% from its year-to-date low of 1.0642.
The strong performance by the EURUSD will possibly extend to 2021 if analysts at JP Morgan, Morgan Stanley, and Goldman Sachs are right. As I wrote yesterday, analysts at Goldman believe that the dollar could drop by as much as 6% in the coming year.
In another interview with Bloomberg, an analyst at Morgan Stanley predicted that the dollar will fall by about 10% in 2021.
As such, the important economic numbers scheduled for today will possibly not have any major impacts on the dollar. That’s because analysts have already priced-in how the numbers will come out like. For example, they expect the Eurozone services PMI to be below 50.
They also expect the ISM and Markit services PMI data from the US to be strong at 56.0 and 56, respectively. Perhaps, the biggest mover for the EUR to USD will be the nonfarm employment numbers scheduled for tomorrow.
EURUSD technical outlook
On the daily chart below, we see that the EURUSD price managed to move above the important resistance level of 1.200 this week. This was an important move considering that the pair has previously struggled to move above that level.
The rally is also supported by the short- and long-term moving averages and the average directional index (ADX).
Therefore, although a pullback is possible, I suspect that the price will continue rallying in the next few weeks. If this happens, the next target will be the February 2018 high of 1.2559. This prediction will be invalidated if the price manages to move below 1.1900.