The rise of the euro against the dollar may have come to an end – projectionsdiborsa.it
Even if the euro continues to flex its muscles against the dollar, we may have reached a turning point in history. Indeed, the rise of the euro against the dollar may have come to an end. This is what the seasonality of the exchange rate between the single European currency and the greenback tells us.
Because the recovery of the greenback could be around the corner
Probability that the euro-dollar exchange rate will close upwards according to the month – projectionsdiborsa.it
The month of November and December saw a significant rise in the euro against the dollar. Indeed, the dollar fell against most currencies amid choppy and insignificant trading on Friday. On the other hand, the data signaled a slight cooling of the US economy, reinforcing expectations of minor interest rate hikes by the Federal Reserve and improving investors’ appetite for risk.
Besides these considerations of a macro nature, there is also the seasonality in favor of the euro against the dollar. As seen from previous figureindeed, the month of December is the one with the highest probability of seeing the euro prevail over the dollar. The month of Januaryon the other hand, is among those who, in the last 20 years, he sees only a 40% chance for the euro to prevail over the dollar. According to history, therefore, starting in January we could see profit taking if not a trend reversal.
Before moving on to the graphical analysis, let us note that, apart from the month of December, there is no clear statistical evidence of the most probable behavior for the others.
Should the euro lose its share against the dollar again, then it could become more expensive to go on holiday to the United States.
The rise of the euro against the dollar may have come to an end: the indications of the graphic analysis
On 23 December the closing of the exchange euro Dollar (FXEURUSD) was at 1.0618, up 0.16% from the previous session. The week, on the other hand, ended with an increase of 0.30%.
Such a prolonged rise of the euro against the dollar has not been seen since the end of 2020. The bullish crossing of the averages, in fact, has been ongoing for 33 sessions. However, for six sessions now, prices have been moving in a narrow trading range which favored the approach of middle school. So here’s what a bearish cross becomes increasingly likely. Carefully monitor the stability of the long-term average (red line). Indeed, a daily close below this level could favor a bearish acceleration.
It had been a year and a half since we saw 6 consecutive weeks on the rise. The euro, therefore, remains set higher against the dollar and at the moment we don’t see any major problems on the horizon. There are, therefore, high probability that the euro has sailed towards a significant upside against the dollar.
