For those thinking about betting against a steady dollar, the main dilemma is what is worth buying against it. For some, the answer seems obvious, though bold enough: the euro.

It should be recognized that the single European currency is quite difficult to compete with the greenback in the current conditions, when not monetary policy, but the trade war is the main factor of exchange rate formation on forex. The dollar can benefit from both the escalation and the reduction of tensions in trade relations between the United States and China. Before October, the euro fell for eight of the nine months. The aggravation of trade disputes between Washington and Beijing contributed to an increase in demand for the USD as a protective asset. The thaw in relations between the parties leads to an increase in investor interest in American securities, which contributes to the flow of capital from Europe to America and leads to a decrease in EUR/USD quotations.

According to EPFR Global, in the week to November 6, cash inflows into equity-focused ETFs reached the highest level in almost two years – $7.5 billion. At the same time, reports that Beijing and Washington agreed to the gradual abolition of previously imposed tariffs to sign phase 1 of the trade agreement, allowed the S&P500 index to update the historical maximum, and the yields of 10-year treasuries to rise above 1.95%. The weakening of global risks, the strong US economy, as well as the moderately accommodative policy of the Federal reserve, strengthen the attractiveness of US securities and spur demand for the dollar.

Last month, the EUR/USD bulls were supported by expectations of an interest rate cut by the Fed and disappointing statistical data on the United States, but the situation changed in November.

Most FOMC officials argue that the US Central Bank is comfortable with the current rate level. Almost half of the 57 experts recently polled by The Wall Street Journal believe that the regulator provided enough incentives to maintain the current growth rate of national GDP. At the same time, 40.4% believe that he did even more than was necessary. Only 9.6% of respondents expect the Fed to continue monetary expansion. According to economists, thanks to preventive measures by the Central Bank, the likelihood of a recession in the United States decreased from 34.2% in October to the current 30.2%.

It is assumed that the elimination of such negative factors as the trade war and Brexit will contribute to the gradual recovery of the European economy and will lend a helping hand to the EUR/USD bulls.

Nordea Bank experts predict that in the first half of next year, the main currency pair will rise to 1.1600.

However, it is not necessary to count on the strong growth of EUR/USD. Another portion of the negative of the euro was presented by German industrial production. In September, the indicator fell by 0.6% in monthly terms and, according to Capital Economics, will subtract 0.25% from German GDP in the third quarter.

EUR/USD is declining for the fourth day in a row, and if the bears can storm the support at 1.1040, the risks of the pair falling to 1.0965 will increase.