In the long term, the euro could reach area 1.5 against the dollar – projectionsdiborsa.it
When you point your finger at 2022 indicating it as the year of the collapse of the euro against the dollar, you forget a fundamental aspect. In other words, from the historical highs in the 1.60 area in 2008, the descent of the euro against the greenback has never stopped. In 2022 the descent hit the popular imagination as the euro against the dollar exchange rate went against the game. An event that hasn’t been seen for over 20 years. Now, however, the conditions for the recovery of the euro may have been created. Therefore, the sensational news on the currency markets in the coming years could be the return of the euro-dollar exchange rate to the 1.5 area.
European Central Bank-proiezionidiborsa.it
The reasons behind the fall and recovery of the euro
When the euro collapsed against the super dollar which marked its 20-year high against the 6 major currencies the motivations behind the strong movement were very clear.
The Federal Reserve raised its key rate by 4.25 percentage points last year. The largest annual increase in forty years. At this point with the widening gap between interest rates and other economies it was inevitable that the dollar would strengthen. On the other hand, the surge in energy prices, accentuated by the war in Ukraine, has weakened the European economy by sinking the euro.
But what were the reasons behind the recovery of the euro?
Thanks to warmer weather, natural gas prices in Europe have plunged since late August to the levels last seen before Russia’s invasion of Ukraine. They have subsidedso, fears of a deep recession in Europe in 2023. On the other hand in the United States the slowdown in inflation caused the Federal Reserve to relax, which was able to loosen its policy of raising rates.
All this favored the recovery of the euro against the dollar.
Amazing news: the euro may have laid the foundations for reaching 1.5 against the dollar
On January 20 the closing of the exchange euro Dollar (FXEURUSD) was at 1.0857, up 0.22% from the previous session.
It had been about 3 years since we had not seen 4 consecutive upward months on the euro-dollar exchange rate. Also the averages are crossing to the upside while the SwingTrading Indicator has already given a bullish signal.
At this point the quotations could quite easily reach the 1.1249 area. Overcoming this obstacle at the end of the month, then, could push quotations into the 1.3 area first, and then 1.5.
On the Euro-Dollar chart, a bullish crossing of the averages could be very close
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