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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.
For more information follow the link to the website of the LiteForex
https://www.liteforex.com/blog/analysts-opinions/euro-remembers-alphabet-forecast-as-of-30122020/?uid=285861726&cid=79634
Dynamics of economic activity

Pandemic strengthened the euro. Forecast as of 29.12.2020
When everything is bad, people buy the dollar. When everyone hopes for the better, the greenback loses its shine. The EURUSD sentiment has radically changed in 2020. Let us discuss the Forex outlook and make up a EURUSD trading plan.

Weekly euro fundamental forecast
In the first half of 2020, the pandemic was the primary source of uncertainty, pressing down the global risk appetite. Everything has radically changed in the third and fourth quarters. COVID-19 saved American democracy, strengthened EU unity, and even pushed the UK and the European Union towards a Brexit deal. News about the development and successful trials of vaccines, as well as the launch of a vaccination campaign against coronavirus, has supported the global stock indices. The first half of 2021 should be more similar to the end of 2020 than the beginning. This is a bearish factor for safe-havens, including the US dollar.

Let us remember January 2020. Donald Trump’s positions were strong; he launched the tax reform and made China meet the US trade demands. Trump’s approval ratings were high, and few doubted that he would be re-elected for the second term. However, the inefficient pandemic management resulted in Trump’s defeat in the November election. The U.S. President used to be the main source of uncertainty due to his eccentric speeches and decisions, and the U.S. dollar was growing. The pandemic was one of the reasons for Trump’s loss, and, in fact, the uncertainty eased, weakening the greenback.

Something like this happened in the euro area. There had been the risks of the euro-area breakup before the first pandemic wave. However, the EU coronavirus recovery fund eliminated the breakup risks, eased political risks, and pressed down safe-haven assets. But for the COVID-19, the UK wouldn't have so readily agreed to sign the Brexit deal. The pandemic caused the UK economy to slide into the worst recession over the past three hundred years, and a no-deal Brexit could have made it worse.

Therefore, the pandemic contributed to the uncertainty easing and the US dollar weakening as a safe haven. So, it is not surprising that the USD net bearish non-commercial positions have reached the highest levels since 2011.
At the end of the year, each new day is more likely to remove uncertainty than add it. So, the greenback’s weakness is not surprising. The markets are optimistic, and the S&P 500 hits fresh highs. The vaccination has started in the euro area. Besides, Donald Trump signed the new fiscal stimulus package. Furthermore, the House of Representatives voted to meet Trump’s demand to boost COVID-19 relief checks from $600 to $2,000, adding $464 billion to the aid plan. These factors support the growth of global stock indexes and EURUSD.

An obstacle to the euro’s rally is the pound’s drop. Traders exit pound longs and market analysts admit that the Brexit deal terms are not optimal for the UK.

Weekly EURUSD trading plan
If the US Senate adopts the House's bill, it will support the S&P 500 rally and increase the global risks appetite. In this case, the EURUSD could break out the resistances at 1.2245 and 1.226 and continue growing towards 1.2305 and 1.234.
For more information follow the link to the website of the LiteForex
https://www.liteforex.com/blog/analysts-opinions/pandemic-strengthened-the-euro-forecast-as-of-29122020/?uid=285861726&cid=79634

Gold got hooked on steroids. Forecast as of 28.12.2020
Six-month gold fundamental analysis
To see the future, you need to look back at the past. Gold is ready to demonstrate the best annual growth since 2010. Stimuli have been the main driver of the XAUUSD rally. In response to the recession caused by the pandemic, the US Congress and the Federal Reserve spared no expense, and most importantly, they acted quickly and decisively. As a result, in August, the precious metal managed to reach an all-time high of $2075 per ounce. In October, gold rallied in the hope of the blue wave. Finally, $892 billion fiscal stimulus endorsed by Congress and Donald Trump pushed gold up to the 6-week high. Can it count on the old trump cards in 2021?
I strongly doubt that next year the Federal Reserve is going to demonstrate a tenth of the madness that has become the Fed's calling card in the spring of 2020. Indeed, the FOMC's December forecasts suggest that the regulator is not going to raise the rate in 2021-2023. However, it is quite possible that it was just overreacting. If inflation expectations rise sharply due to oil, the blue wave, and the booming US economic recovery, the Fed's outlook will definitely change. The hawkish rhetoric and the earlier start of monetary policy normalization will lead to the dollar strengthening. However, I don't think this will happen before the second half of 2021.

In the period from January to June, financial markets will be dominated by the topics of defeating the pandemic, global economic recovery, and fiscal stimulus. The first two of them are likely to support the bears on the USD index. This is good news for the precious metal, but in reality, the gold trend will depend on the US Congress. Even more precisely, it will be determined by American voters. In January, they are going to decide who will get two seats in the Senate. If the Democrats win, the blue wave will become a reality, an $892 billion fiscal stimulus will mark the beginning, and a reflationary environment will become very possible.

On the contrary, the Republican victory would split Congress, make it harder for Joe Biden to push his ideas through lawmakers, and the XAUUSD upward movement will lose momentum. In the first case, gold will have the opportunity to return above $2000 per ounce. In the second, it risks entering the zone of mid-term consolidation of $1750-1950.

These scenarios are based on the weakness of the greenback in the first half of 2021. However, unexpected circumstances can lead to increased uncertainty and return the demand for safe-havens. As a result, the dollar will start to recover earlier than expected. This option is supported by the EURUSD reaction to the US presidential elections. Since 2000, the main currency pair has consistently peaked for one to three months after the vote, after which the prices began to fall.
Six-monthgold trading plan
In my opinion, there is a 60% probability of a divided Congress and a consolidation of gold in the range of $1750-1950 per ounce during the first half of 2021. I give the 30% chances of the blue wave and the rise of a precious metal’s price above $2000. There is a 10% probability of the premature strengthening of the US dollar, which will initiate the bear trend in XAUUSD.
For more information follow the link to the website of the LiteForex
https://www.liteforex.com/blog/analysts-opinions/gold-got-hooked-on-steroids-forecast-as-of-28122020/?uid=285861726&cid=79634
EURUSD reaction to the US presidential election

Euro goes out on the ice. EURUSD forecast 24.12.2020
Weekly fundamental forecast for the euro
Most recessions begin when excessively high central bank rates reduce demand, which worsens the situation in the labour market and further reduces demand. The current downturn is reminiscent of the economy's response to a natural disaster, an earthquake or a tsunami. When they happen, businesses are closed and the supply decreases. Once the disaster is over, the economy faces a V-shaped recovery. In this regard, effective vaccinations will lead to rapid growth in global GDP, increase risk appetite and help continue the EURUSD rally. Everything seems to be very simple, however, life, and in particular Forex life, resembles an ice rink. You could fall at any moment.

I would like to remind you that 2020 began positively. Markets rallied on expectations of a US-China trade deal that would have revived international trade, accelerated global GDP and boosted the euro. Alas, at the turn of winter and spring there was a force majeure in the form of a pandemic, cancelling the bulls' ambitious plans for EURUSD. But not for long. The second half of the year turned out to be great for the main currency pair. Today, the belief in its bright future is based not only on the positive impact of vaccinations on global GDP but also on the high demand for European assets. Particularly, for Italian bonds. Commerzbank, JP Morgan, HSBC and UBS believe in the further reduction in the yield spread between the Italian bonds and the German ones.
The main problems for the bulls on EURUSD are the two trump cards of the dollar. Will it get them out or not? I am talking about the potential strengthening of the greenback when uncertainty increases or in case of the American economy outpacing the world economy in growth (the dollar smile theory). Uncertainty is good for the USD index - it can be judged by its reaction to Donald Trump's threat to veto the $892 billion fiscal stimulus bill. The greenback rose, but the EURUSD bears weren't happy for long.

Congress passed the bill with more than 2/3 of the vote, therefore it has the right to override the president's veto. Trump's own party might cross his way. Democrats clung to the proposal of the president to increase the relief check for Americans from $600 to $2000 but the Republicans are ready to block it. If the 45th US president does not veto or sign the document, it will become law in 10 days. During these days, the dollar will continue finding support in uncertainty.

Trading plan for EURUSD for the week
Brexit is quickly becoming the main growth driver for EURUSD. The EU and the UK have agreed on fisheries and government aid and are about to conclude a historic deal. In theory, this should inspire the pound and the euro to rise, but bulls may start fixing their profits, being guided by "buy the rumour, sell the news" principle. A breakout of the resistance levels at 1.2225 and 1.2245 could trigger EURUSD to go up to the December high, but wouldn't it be better to act after Christmas?
For more information follow the link to the website of the LiteForex
https://www.liteforex.com/blog/analysts-opinions/euro-goes-out-on-the-ice-eurusd-forecast-24122020/?uid=285861726&cid=79634
Yield spread dynamics for bonds in Italy and Germany

Dollar is humiliated. EURUSD forecast 23.12.2020
The 45th President of the United States demands Congress to reconsider the $900 billion bill it has passed and threatens not to sign it. How will this affect the dynamics of EURUSD? Let's discuss this and create a trading plan.

Weekly US dollar fundamental forecast
Many traders prefer technical analysis to fundamental analysis not because they trust the charts. In their opinion, fundamental analysis is just too complex. Indeed, after Congress approved an $892 billion fiscal stimulus, Capital Economics and Oxford Economics raised their forecasts for US GDP for 2021 by 0.5-1 percentage points, the IMF warned that due to the spread of COVID-19 in Europe it will be forced to lower its eurozone GDP estimates, yet the forecast for EURUSD is still bullish! Donald Trump threatens not to sign the fiscal stimulus bill, thus depriving the economy of financial aid, but the greenback is rising. Finally, rumours are heard in the market that if Joe Biden and Janet Yellen abandon their strong dollar policies, the USD Index will skyrocket. Where is the logic? In fact, fundamental analysis is simple.

In times of recession and in the post-crisis period, investors have a heightened sense of global risk appetite, so all events should be viewed through the S&P 500 perspective and the inverse correlation of the stock index with the US dollar. If the US economy accelerates thanks to the new fiscal stimulus, it would be good news for stocks but bad news for the greenback as a safe-haven asset. When Donald Trump brings confusion with his intention not to sign the bill approved by the Congress, the S&P 500 falls and pulls EURUSD down with it. The White House's abandonment of the strong dollar policy will be a blow to the financial markets that are used to it. Now let's wait for the correction of stock indices and the strengthening of the dollar. It's simple, isn't it?

As for the IMF warnings about the reduction of forecasts for the eurozone GDP for 2020 (-8.3%) and 2021 (+ 5.2%) due to the spread of COVID-19 in the Old World, this is a matter of the euro, not the US dollar. Investors firmly believe in the victory over the pandemic with vaccines, in the acceleration of the global economy and international trade next year. Well, forecasts may be adjusted both for the worse and for the better.
Despite the loud statements of Donald Trump who called the fiscal stimulus bill a disgrace and demanded to increase checks for Americans from $600 to $2,000, many investors consider the 45th President's trick as a show-off. At the same time, the quiet reaction of the S&P 500 indicates that financial markets are confident that the document will be signed.

The same can be said about Brexit, which, along with the global risk appetite, is currently the key driver of EURUSD price changes. The EU's chief negotiator Michel Barnier calls Britain's proposal that it should have 35-60% of the €650 million in European fishermen's revenues unacceptable, but the pound is not falling. It looks like investors continue to believe in a last-minute trade.

Trading plan for EURUSD for the week
The second attempt of EURUSD to consolidate above the previously indicated resistance at 1.224-1.2245 was not successful. Will there be a third time? Or will the market decide to calm down on the eve of Christmas and go into short-term consolidation in the range of 1.2085-1.2245? In my opinion, the latter option is more likely. Time to relax?
For more information follow the link to the website of the LiteForex
https://www.liteforex.com/blog/analysts-opinions/dollar-is-humiliated-eurusd-forecast-23122020/?uid=285861726&cid=79634
IMF GDP Forecasts for 2020

Yen will count up to 100. Forecast as of 22.12.2020
The uncertainty connected with the trade wars and the pandemic is gradually leaving the market, and safe-haven assets are growing weaker. How will the USDJPY feel in 2021? Let's find it out and make a trading plan.

Quarterly fundamental forecast for yen
Will the USDJPY bears reach the level of the century of 100 JPY to 1 USD? More and more large American and Japanese banks and investment companies think so. The question is, will the pair drop lower, or pull back from the 2016 levels instead amid the BoJ's discontent? The yen risks closing in the green zone for the sixth consecutive year. However, this time, the reason isn't its strength but the opponent's weakness.

JP Morgan, Goldman Sachs, BNP Paribas, Mizuho Bank, and MUFG forecast that the USDJPY quotes will fall to 100 or 98 amid the USD's weakness. Double deficit, U.S. assets' lower investment appeal expressed in lower real bond yield and a huge money base pull the USD index down. The U.S. Q2 negative current account reached a record level since 2008, while Japan's surplus is only growing.

The Fed spares no money to save the economy and plans to continue its emergency bond-buying program of $120 billion a month until the unemployment and inflation develop to an improved condition. The Central Bank predicts that the federal funds rate will be at the current level until 2024 at least. And that's not a limit. If there's a smell of double recession, the Fed is ready for more. The Bank of Japan's potential is limited, though. It has purchased a major part of local bonds and is often compared with the whale in the Japanese pond/debt market. Although the evolution of consumer prices has been the worst in the past ten years, Haruhiko Kuroda didn't do anything at the BoJ's latest meeting, only saying that the Central Bank could revise the monetary policy.

The BoJ's passivity and the Fed's aggressive extension of the money base narrow U.S.-Japan yield spreads and foster the development of a downtrend in the USDJPY.
Some may think that the U.S. economy will be growing faster than Japan's because of the large monetary stimulus. Tokyo spares no fiscal support either. Cabinet of Japan approved the record big budget of $1 trillion for the fiscal year 2021, which can be easily extended through additional budgets as the 2020 experience has shown.
Quarterly trading plan for USDJPY, EURJPY, GBPJPY, and AUDJPY
If both the USA and Japan demonstrate booming economic growth next year, high-risk assets will benefit from that situation while safe-haven assets will still be kept down. I think the U.S. dollar and the yen will be the main Forex outsiders in 2021. The USDJPY is very likely to reach the level of 100, but I would suggest following November's strategy of buying EURJPY, GBPJPY, and AUDJPY with targets at 126.4 and 128.5, 142.5 and 144.7, 79.5 and 82.4. The first of them has already worked out.
For more information follow the link to the website of the LiteForex
https://www.liteforex.com/blog/analysts-opinions/yen-will-count-up-to-100-forecast-as-of-22122020/?uid=285861726&cid=79634
USDJPY and U.S.-Japan yield differential

Dollar plays Mafia. EURUSD forecast 21.12.2020
At a time when liquidity in financial markets is falling on the eve of Christmas and uncertainty is growing, investors' interest in the US currency is returning. Let's talk about it and create a trading plan for EURUSD.

Monthly US dollar fundamental forecast
Uncertainty is an integral part of our life. Financial markets cannot exist without it. This is why investors return to the US dollar from time to time. Fish stuck in the nets of Brexit - let's sell GBPUSD; a new strain of COVID-19 is discovered in Britain and it spreads 70% faster than the previous one - let's buy the greenback; it's hard to tell how Congress will vote on the fiscal stimulus issue - time to return to the dollar. Uncertainty is not the only factor supporting the dollar. It is likely that the markets oversold it.
Although congressional leaders managed to negotiate about $900 billion in fiscal stimulus, the second-largest aid package in US history after the $2.2 trillion one in March, how the Senate and the House of Representatives will vote on December 21 is yet unknown. The stumbling block is the Fed's emergency lending programs. Democrats accuse Republicans of creating obstacles to the fiscal deal, and a potential clash could lead to the project being rejected.

The new strain of COVID-19 discovered in Britain is even greater uncertainty, forcing London to impose additional restrictions, and more than ten European countries to stop letting in tourists from Britain. While epidemiologists say that there is no connection between it and increased mortality rates and that vaccines may still work in the face of a new threat, but what if this is not the case? The entire plan to defeat the pandemic and rapidly restore global GDP in 2021 could go down the drain.

The uncertainty surrounding Brexit hasn't gone away at all. Boris Johnson needs clarification on the new EU fisheries proposal, he believes that the discussed financial aid package is unbalanced and will allow the EU to issue more subsidies than Britain, and Minister for the Cabinet Office Michael Gove argues that London and Brussels will be forced to conclude not one big deal but a few small agreements. The clock is ticking, time is running out, the pound is falling, dragging EURUSD down with it.

Investors are not sure whether the Fed will begin to tighten monetary policy in 2021. Yes, the FOMC forecasts suggest that rates are unlikely to rise before 2024, but there is also an emergency purchase program. Will the rise of inflation expectations, inspired by the current oil price rally, be the reason for the reduction in the scale of QE?
Dallas Fed President Robert Kaplan would prefer to start cutting down on bond purchases if GDP grows rapidly. Long QE creates problems, he says. It distorts financial markets and creates conditions for imbalances that will be difficult to manage.

Monthly EURUSD trading plan
As expected, the EURUSD pair couldn't hold above the 1.224-1.2245 level, while increased uncertainty increases the likelihood of consolidation in the range of 1.196-1.226. That is unless the vote in the US Congress goes off perfectly and the Brexit problems are resolved successfully in the last minute.
For more information follow the link to the website of the LiteForex
https://www.liteforex.com/blog/analysts-opinions/dollar-plays-mafia-eurusd-forecast-21122020/?uid=285861726&cid=79634
Dynamics of the USD index

Everyone is kicking off the dollar
When the market is too bullish, the downturns can be very fast.

Investors believe the greenback should drop. Will the USD go down?
Christmas and New Year holidays are soon! Good husbands decorate the Christmas trees, and perfect husbands buy decorations for their wives. There only must be money. Of course, those who followed my recommendations and were buying out the euro at $1.075 since early March have cash. But what about those, carried away by the December euphoria and confidence in the EURUSD rise to 1.25, as large banks promise? They seem to have forgotten that more than one hundred billionaires have become rich on the natural human desire to get rich. Yes, Goldman Sachs claims that the euro will strengthen versus the US dollar in 2021, Morgan Stanley suggests the euro should be 10% up, and Citigroup says the USD should be 20% down. However, none of them has a crystal ball to the future. What if anything goes wrong?
People can pay a high price for being gullible. No matter how many business sharks assure you that the EURUSD will definitely grow, you need to believe in the best but prepare for the worst. At least you will avoid that type of financial stability when there was no money, you don’t have it now and don’t seem to have it in the future.
What are the arguments of dollar sellers? Should the uncertainty ease after the successful vaccines’ tests and Joe Biden’s victory in the 2020 election? But these events have already happened, the news has been traded, and the market uncertainty is always there. What if the vaccines won’t be effective or produce unwanted side effects? Why China and Iran are sure that Biden will be less aggressive than Donald Trump? I don’t think Biden wants China to outperform the USA during his term of power or Iran to make a nuclear bomb.

Should one sell the greenback because the Fed is insane and flooded the markets with cheap liquidity? However, Jerome Powell and his fellow central bankers have been passive for a few months already. The Treasury, led by the outgoing Steven Mnuchin, spares no effort to set the central bank back. First, the Treasury makes the Federal Reserve return the unused funds left over the emergency lending programs. Next, Mnuchin tries to pass through the Congress the Treasury’s decision not to renew several emergency Fed lending programs. So, there could be such a conversation between the US banks soon:

- Federal Reserve, could you lend us some money?
- In general, We can. However, We’d rather teach you the basics of austerity.
Other central banks, including the ECB, are now more aggressive than the Fed, so why should we give up on the dollar? How could anyone believe in the suggested twin deficit, the budget deficit, and the current account deficit? The USD bears were saying the same ahead of the recession. The greenback didn’t crash then; why should it drop now?

I don’t encourage you to enter the EURUSD shorts urgently. I am also a euro bull and believe the euro-dollar could rise to 1.25 next year, but I am not an obsessive buyer of any moving asset….Time will make everything clear. It’s time we wait and see.
For more information follow the link to the website of the LiteForex
https://www.liteforex.com/blog/chatty-forex/everyone-is-kicking-off-the-dollar/?uid=285861726&cid=79634

Pound both dead and alive at the same time! Forecast Forecast as of 17.12.2020
The UK withdrawal from the EU makes the British economy vulnerable. However, if London and Brussels sign a deal, everything will turn upside down. Where will the pound go? Let us discuss the pound future and make up a GBPUSD trading plan.

Fundamental pound forecast for a year
In early December, Forex traders were discussing the binary scenario. Provided the Brexit deal is signed, the pound will be alive. Otherwise, if the UK withdraws from the EU without a deal, the pound will be dead. However, the sterling is like a Schrödinger's cat; it has to be alive and dead. Following the GBPUSD crash to 1.314, indicated in the previous pound analytics, the pair soared and is about to hit an upside target at 1.367. Where will the British pound go next?

After a dinner meeting of British Prime Minister Boris Johnson and European Commission President Ursula von der Leyen, everyone was prepared for a no-deal Brexit. But the talks continue, and Boris Johnson will recall the UK parliament over Christmas break to legislate for a deal if one is secured. The European Commission President claims that the fisheries problem the only issue they haven’t found a way forward yet. The French president Emmanuel Macron is the only opponent to the deal, while the German Chancellor Angela Merkel says a deal is better than no deal.

The headwind for a pound was quickly replaced by a tailwind. The chance of the interest-rate cut by the BoE has dropped, and the GBPUSD has soared to the highest level over the past 2.5 years. Of course, the major reason is in a weak dollar, weakened by the Fed and Congress. After all, all safe havens are unwanted now.
The uncertainty around Brexit should embarrass the Bank of England, whose condition also resembles Schrödinger's cat. However, the BoE can remain passive, keeping the rate around 0.1% and continuing QE of £895 billion. The BoE Governor Andrew Bailey noted last week, while the central bank still has room to buy more bonds and pump cash into the financial system, that won’t prevent long lines of trucks if borders are hardened.

Although the pound is up, the UK economy remains weak. The GDP is recovering very slowly, following the worst recession over the past 300 years, and the Bank of England expects a double-dip recession in the fourth quarter. The uncertainty around Brexit makes the UK lose its positions in the world exports.
GBPUSD trading plan for a year
What doesn’t kill us makes us stronger. If London and Brussels sign a deal, the UK will improve its position in international trade. In addition to successful vaccination, associated with the increase in PMI, these factors will support the GBPUSD bulls in 2021. The downside driver in the first quarter will be the referendum on Scotland’s independence. However, I see a good chance of the pair’s rise to 1.4, based on the general situation. In the short run, traders could be exiting long and press the pound a little down, which will allow us to buy the sterling at a lower price.
For more information follow the link to the website of the LiteForex
https://www.liteforex.com/blog/analysts-opinions/pound-both-dead-and-alive-at-the-same-time-forecast-forecast-as-of-17122020/?uid=285861726&cid=79634

Fed and Butterfly Effect. EURUSD forecast 16.12.2020
The Fed’s passive attitude doesn’t shake the financial market s as a rule. However, investors are so stressed that a single word by Jerome Powell could result in a strong market move. Let us discuss the Forex outlook and make up a EURUSD trading plan.

Weekly US dollar fundamental forecast
When the financial market’s stress has reached its climax, even an unimportant factor could quickly move it up or down. The rising gauge of momentum inspires the US stocks bulls; bears note the extreme values of positive sentiment, including the excessive call option volumes. The Fed’s meeting could become the butterfly flapping its wings, which will start a wave of purchases or sales all over the world. Much, if not everything, depends on the S&P 500 trend now. The EURUSD is also very responsive to US stocks.
According to the US stock indexes, investors monitor the global risk appetite, whose growth has seriously weakened the US dollar recently. However, the US long-term economic outlook is bright, while the first quarter will be rather weak, according to the experts polled by the Wall Street Journal. Analysts expect the US GDP to go down to 1.9% in the January-March period, followed by the growth rate rise to 4% in April-June and July-September.

How can the Fed change investors’ risk appetite? The majority of the economists polled by Bloomberg expect the Fed to offer new guidance for its $120-billion asset purchase program. The QE should continue for several months as currently expected; however, investors want the Federal Reserve to link the terms with the inflation rate and unemployment. If the Fed doesn’t meet the expectations, the S&P 500 will go down.
Nonetheless, the primary driver for the S&P 500 moves, either up or down, is the Fed’s projections for the federal funds rate. The latest GDP forecasts suggest the US growth should contract by 3.7% in 2020 and expand by 4% in 2021. The good news about vaccines gives investors hope that the projections will be revised up. But what will the Federal Reserve do with the borrowing costs? The FOMC median gauge suggests that the interest rate will be at a level of 0%-0.25% through at least the end of 2023. If the FOMC officials hint at an earlier rate hike, it will press the US stock market down and strengthen the US dollar.

Weekly EURUSD trading plan
Nordea Markets expects that the Fed should start normalizing its monetary policy already in the first half of 2022 amid the quick rebound of the US economy and the inflation growth. I don’t think such a scenario is viable now. Jerome Powell and his fellow central bankers are more likely to wait and see, leaving the door for further monetary expansion open and sticking to the dovish tone. If so, the S&P 500 rally will continue, followed by the EURUSD rise towards 1.22 and 1.224. However, under the current conditions, it is risky to buy at highs or sell amid the correction expectations. I would rather open long positions on the corrections.
For more information follow the link to the website of the LiteForex
https://www.liteforex.com/blog/analysts-opinions/fed-and-butterfly-effect-eurusd-forecast-16122020/?uid=285861726&cid=79634
Dynamics of momentum indicator and the demand for call option

Kiwi is following the yuan up. Forecast as of 15.12.2020
Monthly fundamental forecast for New Zealand dollar
If the Chinese yuan can grow against the dollar up to the highest level since 1993, why not the New Zealand dollar continues the rally versus a basket of world major currencies? The trading idea suggested in the mid-November to buy the NZDUSD with the targets at 0.705 and 0.72. However, some investors may think the uptrend is exhausting. May the New Zealand GDP report for Q3 convince them otherwise?

According to Citigroup, the high demand for the yuan-backed assets will be supporting the yuan during the entire year of 2021. As a result, the USDCNH pair should be down below 6. That was the level last seen 27 years ago. What is good for the renminbi is good for the kiwi. About 30% of New Zealand exports go to China, so the Chinese economy's growth is a positive factor for Wellington. That is why the kiwi and the yuan are positively correlated.
Beijing managed to defeat COVID-19. Furthermore, China’s manufacturing increased by 7%, retail sales – by 5% in November, and the fixed-asset investment went up 2.6% in the first eleven months of the year. Therefore, the OECD forecast suggesting China’s economy's growth by almost 10% in 2021 compared to the fourth quarter of 2019 is likely to come true.

Wellington also managed to deal with the pandemic effectively. Besides, there is a tailwind from China and the commodity market, as well as a lower chance of the interest-rate cut by the Reserve Bank of New Zealand, which lays a strong foundation for the NZDUSD uptrend. Six weeks ago, financial markets were fully confident that the cash rate would drop to -0.25% in 2021. Currently, the chances of such a scenario are estimated at 30%. The sharp rise in property prices could be the reason. The money has never been as cheap as now, and the housing prices soared. That is why New Zealand's prime minister, Jacinda Ardern, asked the RBNZ to take some measures to prevent growing social inequality among the people in New Zealand.
The NZD could follow the AUD trend, which soared after the report on the Australian GDP for Q3. Bloomberg experts suggest the New Zealand economy should expand by 12.9% in the July-September period, following the drop by 12.2% in the April-June period. Better than expected data could give a new momentum to the NZDUSD uptrend. After all, I believe the kiwi price is quite a dependant on the foreign environment. Therefore, a decline in the global risk appetite could result in a short-term correction, while the medium- and long-term NZD outlook remains bullish.

Monthly NZDUSD trading plan
Before Christmas, there will be uncertainty in the financial markets because of Brexit, adopting the fresh fiscal stimulus by the US Congress, and a potential trade war between China and Australia. Therefore, the US stock indexes, as well as the commodities, could be corrected down, pressing the NZDUSD also down. That is good! Traders will have a chance to buy the pair at a lower price and set the targets at 0.72 and 0.73-0.735.
For more information follow the link to the website of the LiteForex
https://www.liteforex.com/blog/analysts-opinions/kiwi-is-following-the-yuan-up-forecast-as-of-15122020/?uid=285861726&cid=79634
Dynamics of NZDUSD and USDCNY