According to the observations of most analysts, the US and European currencies tend to slow down and even stagnate on New Year's Eve and Christmas holidays. Experts do not expect a rapid growth of trading, although a lull in the markets is also not expected.
For the European currency, the end of last week was marked by a slowdown and subsequent decline. Supported by the absence of signs of recession in the US economy, the dollar increased and took charge, even though a few months ago, the inversion of the yield curve indicated the opposite. Analysts say that in the third quarter of 2019, GDP rose by 2.1%, and just last month, other key indicators also increased: consumer spending-by 0.4%, and income-by 0.5%. This month, experts recorded a rise in the consumer sentiment index from the previous 96.8 to 99.3 points. The dollar ignored other minor troubles.
A positive factor for the dollar was the steady growth of the leading US index S&P 500. Note that it rises for the sixth session in a row, not tired to update historical highs. Experts believe that the reasons for this is the strong macro-statistical data in the United States, the expectation of signing an agreement between Washington and Beijing, and the reduction of duties on a number of food products by China.
The recent rally of the pound played a significant role in the strengthening of the dollar and the growth of US indices. Thanks to this, the euro was able to strengthen its positions, which were slightly shaken. Experts have recorded a decrease in liquidity in the EUR / USD pair on the eve of the holidays.
At the end of last week, the EUR / USD pair formed a sluggish upward movement, which continued at the beginning of the coming week. Last Friday, the tandem traded in the range of 1.1093–1.1094, seeking to go up, but the attempts were unsuccessful.
On Monday morning, December 23, EUR/USD started at 1.1085, and tried to move further. However, these efforts did not lead to anything. The tandem "tramples" on the spot, trying to go beyond the current price range.
According to analysts, the EUR/USD pair tried to confirm the upward trend at the end of last week, but attempts were unsuccessful. The pair was strongly distanced from the psychologically important level of 1.1200, which experts believe to be difficult to catch up now.
Many experts believe that the dollar has become a risky currency recently. This was facilitated by a 30% rally in the US stock market, capital inflows, and a positive reaction to the good news regarding the US-China talks. At the same time, the euro is also undergoing radical changes, gradually turning into an asset-refuge. The reasons for this, analysts believe, are the reduction of volatility in the markets, the build-up of cheap liquidity from the ECB, and ultra-soft monetary policy of the European regulator. Experts believe that the euro will be supported by the uncertainty existing in the market next year. At the same time, the dollar will continue to occupy a leading position.
In addition, according to experts, the current low-active state of the European and American currencies at any time can be replaced by a rapid jerk and cheer up the market. However, the pre-holiday mood is not conducive to such achievements, and although analysts do not expect surprises from the EUR / USD pair, the market is still wary.