31.12.202011:28 Forex Analysis & Reviews: Analysis and forecast for EUR/USD on December 31, 2020

As already noted the day before, the main currency pair of the Forex market ends 2020 with strong growth. The outgoing year was very unusual and difficult, as the world was covered by the COVID-19 pandemic, which dealt a serious blow to the global economy. In this regard, the world's leading central banks were forced to resort to the introduction of ultra-soft monetary policy, based on the support of their economies from the consequences of the coronavirus epidemic. However, the German Bundesbank stands out in this row, the chairman of which said yesterday that one should not expect eternally low-interest rates. It should be noted that the head of the Bank of Germany, Jens Weidmann, is a typical "hawk" and has always advocated tightening monetary policy.

If we return to the topic of coronavirus, then Europe, and especially the United States, suffered the most severe losses in terms of mortality from the pandemic. For example, in Italy, more than 73,500 people have died since the start of COVID-19. For such a relatively small country, the figure is more than serious.

Daily

If we turn to the technical picture for EUR/USD, then at yesterday's trading, the euro bulls finally managed to break through the strong resistance of sellers at 1.2272 and end the session on December 30 above this mark. During the growth in yesterday's trading, the pair reached the previously designated target and showed highs at 1.2309, however, it could not gain a foothold and closed the day at 1.2296. However, this is already a serious achievement for players to increase the rate. Now, as already noted, the euro bulls need to overcome the strong technical zone of 1.2300-1.2320 and close today's trading and the entire current year higher. With this development, the road will open to a strong and important price area of 1.2460-1.2520. In the event of a breakthrough of a significant technical and psychological level of 1.2500, it will be possible to count on the subsequent growth of the single European currency. However, if this happens, it will be next year. In the meantime, today the US dollar continues to lose its position on a wide range of currencies. This factor was influenced by the loss of Donald Trump in the presidential election and the election of Joe Biden, as well as the adoption of a new $ 900 billion program in the United States to support the world's leading economy. Rapid vaccination of the population against COVID-19 also plays an important role in the positive mood on global trading platforms. In some leading world powers, this process has already started, however, it will take time to vaccinate about 70% of the inhabitants of a particular country to develop collective immunity to the coronavirus. In general, the world is optimistic about the New Year and hopes that it will not be as difficult as the outgoing year.

Since today is December 31, on the eve of the New Year, I will not give any clear trading recommendations, besides, the market closes earlier than usual today, and tomorrow it does not work at all. The only thing that I would like to recommend is closing all open positions (who have them) before the end of today's trading. According to long-term observations, trading on January 2 opens with price gaps, which can be quite significant, so do not take any risks.