The financial year gains momentum despite the avalanche of global problems, and the main Forex trends have already become more or less clear. Below is a concise overview of the trends you need to know before you start trading in 2021.
USD Index Goes Down
Many analytics considered the 2020 USD Index decline as the start of a long road down. In March, the dollar reached the 103 level, but quickly went down to 90. NASDAQ, Forbes, Bloomberg, and other authorities unanimously say that the American national currency will continue to move down as the tension only gets stronger. We’ve already seen a fall to the 71 level in 2008, and subsidence to the level 73 in 2011.
The trade for a lower dollar may become very intense, while the trends for riskier currencies may increase as well. You should consider this trend first and foremost to build a winning CFD Forex strategy in 2021.
AUD was strong in 2020. The currency received a huge boost from the commodity segment. The Reserve Bank of Australia is quite a pacifist to the AUD/USD pair, so are other central banks of the country. The Reserve Bank of Australia may use the lowered interest rates in developed countries as an opportunity to put extra pressure on bond yields without hurting the AUD.
As for the worsened trading relations with China, there are no signs of critical risks as both markets have strong autonomy from each other. This means that a further decline in relationships is unlikely.
GBP Waits Brexit Outcomes
Unfortunately, it’s not possible to give a clear prediction on the British Pound yet as we still don’t realize the Brexit impact on the GBP/USD. Another pressure point for the British economy for the beginning of 2021 is the new COVID-19 strain. Still, it won’t hit the market as strongly as a no-deal Brexit.
CAD Waits for a Boost
The Canadian dollar is a commodity-related currency, which means it can gain a boost in 2021, but only if WTI oil holds its prices above the $50 point and preserves the positive dynamic. The only risk for CAS is a sudden return of the USD to a significantly higher level.
EUR to Test New Highs
The EUR/UDS pair has a promising opportunity to gain strong upside momentum, but only if the test run of the new highs ends up with consistently high demand for the European currency. The chances to gain a strong positive dynamic against the USD are quite high.
Year of the USD
The attention of all traders and economists will be focused on the faith of the USD that may fall under greater pressure. At the same time, AUD and CAD are likely to gain support due to commodities growth. The GBP trend is still vague after a trade deal with the EU, while the EUR is about to have one more strong year despite all the EU issues.