EUR Q2 2021 Fundamental Forecast

 The key question for EUR/USD traders looking at the second quarter of 2021 is whether the steep decline in the pair in the first quarter will reverse in Q2, and the answer is quite possibly yes. The reasons for the Q1 drop have been well-rehearsed: the EU has been slower than both the US and the UK in vaccinating its people against the coronavirus. As a result, lockdowns will likely persist for longer in the EU, and the EU economy will therefore likely recover more slowly from the slump caused by the Covid-19 pandemic.

However, as the first quarter was ending, signs were beginning to emerge that the EU was taking steps to improve the vaccine rollout and repair damaged relations with countries like the UK to avoid a vaccine war. This is not to say that Euro strength can be expected all round; to the contrary falls can be expected against many other currencies.

However, EUR/USD has been exceptionally weak because of the US Dollar’s role as the safe haven of choice for most investors seeking to reduce their risk and that particular pair may therefore be due a recovery if risk appetite returns.

However, as the first quarter was ending, signs were beginning to emerge that the EU was taking steps to improve the vaccine rollout and repair damaged relations with countries like the UK to avoid a vaccine war. This is not to say that Euro strength can be expected all round; to the contrary falls can be expected against many other currencies.

However, EUR/USD has been exceptionally weak because of the US Dollar’s role as the safe haven of choice for most investors seeking to reduce their risk and that particular pair may therefore be due a recovery if risk appetite returns.

EURO WEAKNESS ELSEWHERE

This is all, of course, predicated on both a more optimistic market tone in Q2 and no third wave of virus infections in the EU. Moreover, EUR/USD is a special case because it has fallen so far on US Dollar buying. Against other currencies that have also dropped against the US Dollar, the Euro could well struggle as the perception persists that the EU is behind other countries in handling the pandemic and taking measures to ensure an economic recovery.

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Daily News : Market Will React on Top News

Money Life Research

1️⃣ USD is solid when the US economy is outperformed

- The dollar remained firm in early European trading on Thursday, close to a multi-month high on expectations of strong US economic growth, supported by more and over-fiscal stimulus Vaccine rollout is accelerating.

U.S. President Joe Biden announced his long-awaited $ 2 trillion infrastructure rebuild on Wednesday, which will be a new pump of money into the economy after the pack The US $ 1.9 trillion bailout was recently approved.

Wednesday's ADP report showed US private sector job payrolls increased by 517,000 positions last month, which is not a bad step ahead of the official US nonfarm payrolls today. American ants will add 650,000 jobs by March.

2️⃣ ECB commits to continue to support the economy

- ECB chief economist Philip Lane said: The rise in inflation in the euro area is due to temporary factors, the underlying trend is still weak, so the ECB needs to maintain support for the economy. .

- Inflation has steadily increased this year and is likely to exceed ECB's target by nearly 2% in the coming months, due to rising energy costs, rising taxes, household consumption likely to increase, and technical factors. technology related to pandemic shock.

Nominal and real yields have moved in the opposite direction in recent weeks, with nominal yields rising to pre-pandemic levels while real yields are trending to decline to their lowest levels earlier this year.

3️⃣ Today's notable facts and data

- At 20:30 the United States will announce the nonfarm employment population after the March seasonal adjustment. The expected value is 647,000, much higher than the previous value of 379,000. Markets are concerned that shortened US Treasury market times could cause the market to suddenly expand.

At 23:00, Fed Bostic will give a speech.

- Affected by Easter, the US stock exchanges, European countries, Australia and Hong Kong are all closed for one day. CME precious metals and US crude are suspended for all day, and ICE Brent crude contracts are suspended for the whole day. Foreign exchange contracts end before their expiration

Important Facts in News

 Yesterday's main news

- Biden officially announced giant infrastructure plans.
The number of ADP jobs in the United States rose by 517,000 in March, a record high since September last year.

2?? Today's notable facts and data

- At 19:00, the 15th OPEC and non-OPEC Oil Ministers Meeting is held, investors can continue to pay attention to the oil-producing countries' declaration of the cut. Quantity.

- At 20:30, the United States will publish the initial number of claims for unemployment benefits until March 27.

- Due to the Easter holiday, the total number of oil rigs in the United States for the week up to April 2 will be announced before 01:00 am on Friday.

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Gold Top News by Money Life Research

 In the new month, everyone with a drawdown monthly candle closed above the monthly chart, along with that on the daily chart time frame, after falling sharply to 1678, this precious metal formed the 2 pattern. bottom then go up. The session closed yesterday with a fairly strong bullish candle that took up most of the downward pressure of the yesterday's candle. So my personal opinion about precious metals is more and more affirmed as in today's 2 that we will continue to buy when prices return to the low range in the coming short term.

Considering on the short term frame rather than H4, we can see a very strong increase. If in this Asian session, gold price remains above 1705, it is likely that the price will go up without much correction, but if the price can adjust further to the 1696-1700 zone, this is the ideal price range for them. We increase the Buy status. With the next goal this precious metal needs to conquer is the price range 1720-1725 in today's session.

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