Eurusd To Cross Resistance

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Eurusd To Cross Resistance

Eur/Usd To Cross 1.20 In Coming Months

FX analysts from BBH forecast that the EUR/USD pair is highly likely to cross the 1.20 resistance in the coming months. In the meantime, the EUR/USD pair will likely trade in its range from 1.15 to 1.17 until a big announcement comes from the Federal Reserve.

The general consensus is that the Fed will lower the rates and resume its easing policy. However, it will not be enough for the Trump administration, as they will say it is too late!

Ecb Will Stay On Hold

But the easing policy by the Federal Reserve will push the EUR/USD pair to challenge the strong resistance of 1.20.

Meanwhile, the long-term yields of France are showing signs of easing. In addition, the bond auctions also showed a decline in demand, but it is still pretty strong.

As the Federal Reserve will resume its easing policy, the ECB is expected to stay on hold. The European Central Bank is following more of a data-based approach, as it still doesn't want to rush into policy easing again.

With all things considered, BBH believes that EUR/USD will soon break out of its range by crossing the 1.17 resistance level. Once that level is breached, the next target for the Euro bulls will be 1.20.

Beyond the 1.20 handle, the next key level for the Euro bulls will be 1.22, which is also a strong resistance level. However, all of that depends on the fact that the ECB stays on hold while the Fed continues to cut the rates.

Another angle to this forecast is that the fears of recession in the US are once again surfacing. So, it might be too late for the Fed to take action and lower rates.

If the US economy enters a technical recession, it would also impact the US Dollar negatively. Once again, that would play in favor of the Euro and will allow it to gain upside.

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