Euro’s forecast from Danske Bank

Euro’s forecast from Danske Bank

2020-09-03 • Updated

According to economists from Danske Bank, the euro is still overvalued. They see the fair price at 1.16. Let’s see why.

To begin with, Danske Bank is a Danish bank, headquartered in Copenhagen. It is recognized as the largest bank in the whole of Denmark and a main retail bank in northern Europe. It is a credible bank with a huge background, therefore its forecasts are taken seriously. Danske Bank has doubts over the further euro appreciation. The main reason is the tech stocks’ boom. All major tech companies are based in the USA, therefore, all the capital flows will be headed there. Moreover, the bank believes the US equity market will keep rallying for longer and attract more and more investors. Danske maintains a EUR/USD forecast of 1.1600 in three months.

Besides, the European Central Bank doesn’t like the idea of the expensive euro as it will weigh on the EU exports and, as a result, may jeopardize the economic recovery. The euro has risen this week to almost multi-year highs but then contracted sharply amid the stronger dollar. If this trend continues, the ECB will have to take some action. According to Pictet Wealth Management, “the ECB is expected to cut its 2022 inflation forecast next week from 1.3% to 1.2% or 1.1% to reflect the deflationary impact of a stronger euro on the price of imports”. Moreover, the ECM may step up the pace of asset purchases as well. In a nutshell, the ECB will make all efforts to depreciate the euro.

Technical tips

EUR/USD has just bounced off the key support of 1.1800. Now it’s moving upwards to the significant resistance of 1.1850, which it has touched a few times already. If it manages to break it through, it will rise to the psychological mark of 1.1900. Support levels are at 1.1800 and 1.1770.

All eyes on the NFP report tomorrow at 15:30 MT time, as it will set the tone for the whole market for Friday and the next week as well. Stay tuned!

Check the economic calendar

EURUSDH4.png

TRADE NOW

Similar

Oil: Russia-Ukraine Crisis Could Boost Oil Prices
Oil: Russia-Ukraine Crisis Could Boost Oil Prices

Crude oil futures surged on Monday due to disruptions in Russian refining capacity caused by Ukrainian drone strikes and Moscow's decision to cut output to comply with OPEC+ targets. The West Texas Intermediate (WTI) contract for May settled at $81.95 a barrel, up $1.32, while the Brent contract for May settled at $86.57 a barrel, also up $1.32. Russia instructed...

WTI and Brent React To a Key Pivot
WTI and Brent React To a Key Pivot

Brent oil is currently on a bullish trend, facing resistance near $84 and supported by the 200-day EMA. Breaking above this level could lead to a climb towards $90. Short-term support is observed around $80, backed by the 50-day EMA. As summer approaches and travel increases, crude oil tends to benefit from seasonal patterns. Despite temporary setbacks, buying...

Latest news

USD: Powell Speaks on Cutting Interest Rates
USD: Powell Speaks on Cutting Interest Rates

Jerome H. Powell, the Federal Reserve chair, stated that the central bank can afford to be patient in deciding when to cut interest rates, citing easing inflation and stable economic growth. Powell emphasized the Fed's independence from political influences, particularly relevant as the election season nears. The Fed had raised interest rates to 5.3 ...

WTT: Currency Pairs To Trade In April
WTT: Currency Pairs To Trade In April

Hello again my friends, it’s time for another episode of “What to Trade,” this time, for the month of April. As usual, I present to you some of my most anticipated trade ideas for the month of April, according to my technical analysis style. I therefore encourage you to do your due diligence, as always, and manage your risks appropriately.

Deposit with your local payment systems

Data collection notice

FBS maintains a record of your data to run this website. By pressing the “Accept” button, you agree to our Privacy policy.

Callback

A manager will call you shortly.

Change number

Your request is accepted.

A manager will call you shortly.

Next callback request for this phone number
will be available in

If you have an urgent issue please contact us via
Live chat

Internal error. Please try again later

Don’t waste your time – keep track of how NFP affects the US dollar and profit!

You are using an older version of your browser.

Update it to the latest version or try another one for a safer, more comfortable and productive trading experience.

Safari Chrome Firefox Opera