The winning dollar of the year 2021; EUR / CHF, the negative trend still in progress

Key points of the article:

TRADING WISHES TO ALL!

  • The dollar closes its best year since 2015
  • EUR / CHF: The trend exposes the euro Swiss franc to a continuation towards 1.0250

Currency table – Time horizon: daily

Prejudice

Resistence

Support

Note

AUD / JPY

bullish

84.15

78.8

AUD / USD

Neutral

0.729

0.699

EUR / AUD

Neutral

1.59

1,556

EUR / CHF

bearish

1.0467

1,024

EUR / GBP

Neutral

0.866

0.837

Bearish channel

EUR / JPY

bullish

133

127.5

EUR / USD

bearish

1.14

1.117

Horizontal consolidation

GBP / JPY

bullish

158.25

148.96

GBP / USD

Neutral

1.3607

1.3175

NZD / USD

bearish

0.687

0.6735

USD / CHF

Neutral

0.9368

0.91

USD / CAD

Neutral

1.2957

1.2607

USD / JPY

bullish

115.5

112.73

Resistance test

The dollar closes its best year since 2015

The dollar index fell on Friday in a quiet holiday market but was expected to close 2021 with a nearly 7% gain as investors bet the US Federal Reserve will raise rates further before most other major banks due to galloping inflation fueled by the stimulus of COVID-19 initiatives.

Set for its best year since 2015, the dollar was buoyed by an improving US economy and persistent inflation that led to a tightening turn by the Fed, which is now expected to start raising interest rates already. in March.

The best performance among the major currencies against the dollar in 2021 was the Canadian dollar, which remained almost flat for the year, helped by expectations that the Bank of Canada will start tightening monetary policy as early as January.

The worst return against the greenback among the major currencies is the Japanese yen, which has lost around 10% this year.

The euro, which is the largest weighting in the dollar index, fell just over 7% in 2021 as the European Central Bank (ECB) “sticks to ultra-accommodative monetary policy stances as the Fed accelerates the reduction. its asset purchase program and plans to raise its key rates.

Continued weakening of the common currency is likely to continue early in the year to the 1.10 threshold and likely beyond, as headwinds remain firmly in place, where only the (highly unlikely) possibility of an ECB rally between late 2022 and early 2023 could provide some support. (See article on euro forecasts)

According to analysts, the euro was down around 6% against the pound as easing concerns in Britain about the economic impact of the pandemic strengthened the British currency, expecting further rate hikes from the Bank of Australia. England in 2022. While the pound hit its highest level against the euro since February 2020, it fell just over 1% against the dollar over the year.

Finally, the year on exchange rates was characterized by the decline of the Turkish lira, which lost about 44% against the dollar in its worst year of the last two decades, battered by runaway inflation and the unorthodox monetary policy of the Turkish government.

For this first week of the year, the main events to look out for will mainly be the ISM, the Fed minutes and the US employment data, the PMI and the unemployment rate in Europe.

EUR / CHF: The trend exposes the euro Swiss franc to a continuation towards 1.0250

The euro against the Swiss franc remains in a very marked negative trend. The December rebound attempt failed with a candle that included a long high wick on December 16th demonstrating the strong seller’s presence at 1.0450. This level therefore constitutes an inflection point in the downward movement. . The 34-period moving average has also been a stumbling block since early October.

The likelihood of a further decline in the euro against the Swiss franc is the main scenario for this start of the year with the target of the April 2015 low of 1.0250. Breaking this level would expose the parity to decline and then to a 7-year low below 0.9800.

Evolution of the euro against the Swiss franc in daily data:

Forex Morning Meeting: the winning dollar of the year 2021;  EUR / CHF, the negative trend still in progress

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