The euro is growing against the dollar

Goldman Sachs analysts believe that expectations for economic growth in the Eurozone will improve in the next few months amid faster vaccinations and reduced hospitalizations. The investment bank’s foreign exchange strategists have published a recommendation for clients to buy euros with a target of 1.25 on the horizon of three months.

Does the euro look so confident now to buy it against the dollar? Alexander Kuptsikevich, an analyst at FxPro, answered a question from Fortrader magazine.

– EURUSD has jumped 3% since the beginning of the month, which has given rise to the desire of short-term traders to bet on a pullback from local extremes. But this approach of short-term speculators suggests that the growth of the euro since the beginning of April is a correction from the decline in January-March. I propose to look at the situation more broadly.

The decline in EURUSD from January to March should be viewed as a corrective pullback after the growth impulse from March to December (to the first days of January, to be precise). It was a beautiful 38.2% retracement from the March 2020 to January 2021 lows. Along the way, EURUSD plunged below the 200-day moving average, which for a while forced to look at the market from a bearish side. However, it is important to pay attention to how the decline of the pair has slowed below this level and how fast its recovery has been in the last few days.

Euro to dollar exchange rate today

Yesterday EURUSD showed a very strong rise from the 50-day moving average, which also acts as a strong confirmation signal for bullish sentiment. Having started a rapid ascent, EURUSD can confidently and almost without rollbacks return to the area of ​​local highs, that is, above 1.2250 or even up to 1.2350. Further, in the perspective of three months, indeed we can see 1.25, that is, here we should agree with Goldman Sachs.

Looking at longer-term growth targets, they could be 1.3400 (161.8% of the March-January rally) or even 1.4000 (2014 highs).

Libertex [CPS] WW



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