The pair is on the rise.

Today we would take a look at the EUR/USD currency pair, which is one of the most popular trading instruments. Since last week the pair has continued to climb, though only modestly. Currently it is approaching a monthly high above 1.18.

The European single currency is still in a bit of a questionable spot. Investors were disappointed earlier this year by eurozone fundamentals and guessed there would not be an end to the European Central Bank’s stimulus program anytime soon. However, recently inflation targets hit 1.9%, very close to the 2% ideal level, and the ECB stated they were satisfied with the economic growth in the European Union. The most important event this week would be Thursday’s ECB meeting where they are expected to provide some kind of hint regarding a turn towards a more hawkish policy-making from now on. We are not likely to see an interest rate increase this year, but even if the ECB announces a decrease of purchases in preparation for ending the stimulus, it would be a good sign. Furthermore, the new Italian government does not seem as radical in its fiscal policy, which has helped calm down the political tensions surround the euro.

The US dollar suffered last week in part due to optimism regarding the euro. A bigger source of tension were the upcoming meetings of Donald Trump: he first attended the G7 summit in Canada last weekend, and is set to meet Kim Jong-un in Singapore tomorrow. The G7 summit proved a failure in resolving trade war tensions, as Trump did not manage to agree with other political leaders (Trudeau, Merkel, Macron, among others) on the tariff issue. He insists that the tariffs imposed by the United States first are valid and fair, while retaliation tariffs from other countries against the US are not. This is why the United States did not sign the joint communique which is typically produced at the end of each G7 summit. This is putting America in a tough, friendless spot, and is exacerbating fears for damage to the global economy.

In terms of the daily chart, today we have a pivot point for the pair located at 1.1781, though the pair is currently trading above it. We expect the EUR/USD to continue increasing for now, as it is currently above its daily resistances at 1.1796 and 1.1806. If the pair drops below the pivot point, be aware of the nearby support levels 1.1776 and 1.1766. The indicators of technical analysis agree on a strong buy recommendation.