Traders around the world subscribe to Samuel Leach’s Forex Weekly Forecast, in which the highly commended investor makes predictions on upcoming markets to help traders decide where and when to invest. In his last episode of 2020, Samuel teamed up with colleague Elliot Guinn to discuss how the US dollar is performing against the euro, British pound, and Japanese yen. Of course, the values of these currencies rely on several factors thanks to the political challenges taking storm. But Samuel and Elliot have broken these factors down so you can see how the markets are shifting.
Here’s everything you need to know about how the euro, pound, and dollar are fluctuating over winter.
Euro To US Dollar
Samuel kicked off the Forecast by comparing the euro against the US dollar over the festive period. Christmas is usually one of the ‘easier’ periods for trading, as winter months are often low-liquidity months, and price ranges rarely move dramatically. Having looked at the profitable cluster pullbacks during this period, Samuel recommended keeping trading to a low level over Christmas, looking for the range to form over a low-volume period, and sticking to intra-day trading instead of overnight holdings.
Samuel expects to see a continuation of the euro against the dollar as we progress into the new year, though Brexit may affect the value of the euro, and Biden taking over the US presidency may affect the value of the dollar – which is particularly weak at the moment. For example, gold, bitcoin, and international currencies have all increased against the dollar over recent months.
British Pound To US Dollar
Meanwhile, Brexit will redefine the strength of the British pound over the upcoming weeks and months. The pound has seen some great cluster pullbacks and reached a high range over recent weeks. Upon breaking through this high range at 1.35, Samuel questioned whether this could be a fake breakout and whether we might see price reject off this level. Samuel continues to watch this trend closely, as it could form as a support level, causing the price to bounce off and progress to the upside – though this all depends on Brexit’s progress.
US Dollar To Japanese Yen
When comparing the US dollar to the Japanese yen, Samuel explained that traders should wait for the current range to break out before making trades. He expects prices to rebound a little or have a deeper pullback before seeing more continued selling. This is most likely to happen when Biden takes over as president.
Samuel then handed over to Elliot, who discussed the effects that indices and recent political news could have on the US dollar against the Japanese yen. Elliot explained that numerous factors may affect how these currencies compare: for starters, the US stimulus deal, Brexit, the recent vaccine approvals in the UK and US, and rising oil prices. Plus, the US is supporting its economy through bond-buying until the country has made substantial progress to counter the coronavirus, and Trump has added 80 Chinese companies with ties to the Chinese military to the US trade blacklist. Meanwhile, the Bank of England is keeping rates and QE unchanged, and the UK is likely to hit its biggest recession in 300 years.
As a result, Samuel recommends staying away from the US dollar against the Japanese yen until we’ve seen a deeper pullback or a clear spike rejection. However, he expects prices to rebound over upcoming weeks, especially once the Biden administration is in place.
About Samuel Leach
Samuel Leach is a stock and FX trader who mentors people from 64 countries on how to become successful traders through his accredited international training program. He started his trading journey with C Hoare & Co., a leading independent bank in the UK. Samuel climbed the ranks with this private bank and developed his personal wealth while trading on stock and FX markets before opening Samuel & Co. Trading in 2012.
Samuel & Co Trading offers an educational hub, designed to coach traders to diversify effectively in financial markets. So far, Samuel and his colleagues have helped thousands of traders from all corners of the world to understand their markets. Samuel is also the author of the Formula for Success book and was ranked as the number one Yahoo Finance trader to follow in 2020. Meanwhile, Samuel & Co Trading came 7th out of 500 companies entered into the UK Fintech Disrupter Awards last year, celebrating their forward-facing algorithmic trading.