We can buy the pair today.

Today we would take a look at the EUR/USD currency pair. The pair suffered a steep drop right after the New Year’s holidays but is now on its way to another recovery.

The European single currency continues to baffle investors. Even though the main political source of uncertainty affecting the euro is now eliminated - Italy agreed to revise its budget to slightly lower numbers, the EUR is still unable to rally. This is largely due to more significant long-term factors. For instance, inflation remains off-target, casting doubt as to whether the European Central Bank will be able to begin with its hawkish switch in monetary policy by mid-2019 as initially expected. That scenario seems less likely now, considering that back when the ECB made that forecast the global economy wasn’t caught in a trade war and economic growth was better all-around. Today the eurozone retail sales came in better than forecasted and the construction PMI for Germany was also higher, offering a glimmer of hope.

On the other hand, the American dollar continues to be support by strong economic data. Nevertheless, the rising interest rates in the United States have been particularly hard on developing markets and stock markets all over the world (including Wall Street). On account of that, Federal Reserve Chairman Jerome Powell spoke about exercising less control from now on and being more patient and attentive to market needs. This could signal a pause in the hawkishness of the central bank.

In terms of the daily chart, today we have a pivot point for the pair located at 1.1405, with the price currently well above it. The daily support levels lie at 1.1396 and 1.1383. The daily resistances are located at 1.1427 and 1.1440. The indicators of technical analysis point to a strong buy recommendation.