When will the euro/dollar pair return to 1.15?

By 14/08/2020News
Morning Stock News

Gold  1954,685

EURUSD   1,1816

DJIA  27869,50

OIL.WTI  42,67

DAX   12964,92

The strong rising trend in the EUR/USD pair was stopped 10 days ago. Now there is a consolidation in the market. Recently we made an interesting assumption. The end of the trend may have been affected by the decline of new COVID-19 cases in the USA and their increase in Europe. However, new factors have been added this week.



On Wednesday, the US consumer price index data for July was released. It turned out to be much higher than expected. Inflation has already accelerated to 1.6% per annum. At the same time, a similar consumer price index in Germany is 0%.
What does it say? Sooner or later the Fed will have to do something about inflation, it may reach 3% or even 5%. Interest rates, of course, will not rise for a long time. On the other hand, it will be possible to remove excess cash liquidity from the market. As always, it will lead to a shortage of dollars and increased demand for them.
But in Europe, from this point of view, everything is good. There’s virtually no inflation. So the EU Central Bank can continue to pump the economy with new money. But everything can change very quickly.
Therefore, there is a strong risk that the price will quickly return to 1.15.


Oil has been in a narrow range for 2 months now. This is not typical of such a volatile asset. At the moment the demand is balancing the supply.

Black gold is affected by 2 factors:
• Risk of a second wave of coronavirus with the onset of autumn in Europe and Asia. In this case, mass quarantine measures, closures of cities and entire countries are again waiting for us.
• The hope is that soon the world will get the vaccine, people will be vaccinated, which means that the demand for travel will again increase dramatically, closed production facilities will be thawed, etc.

Which of these factors outweighs? We don’t know. The main thing to remember is that reduced volatility is always interrupted by explosive movements, as was the case recently with Bitcoin.

What’s waiting for us today?

04.00 Retail sales in China for July
11.00 EU GDP for 2nd quarter
14.30 US retail sales for July

Important Notes on This Publication:

The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 81% of retail investor accounts lose money when trading CFDs with this provider.
You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.