We expect the pair to remain bearish.

Today we would take a look at the EUR/USD currency pair, which is one of the most popular trading instruments. Since around the middle of April the pair turned towards a bearish trend on account of diverging economic statistics from Europe and the United States. Over the weekend the euro rallied, but can this momentum continue?

It is no secret that the euro has been weakening lately. This started with disappointing economic statistics which showed inflation is lagging behind forecasts, meaning the European Central Bank would have to keep its stimulus measures in place for at least another year. We expect some volatility in pairs including the euro today, as the revision for the GDP of the eurozone for the second quarter of 2018 will be published today, and tomorrow there will be a speech by ECB President Draghi in Frankfurt. More importantly, tomorrow we also expect the core price inflation for April, which is expected to drop from 1.3 to 1.2%. Unless the CPI is better than expected, the weakness in the euro will continue.

Things continue positively for the USD, on the other hand. Earlier we had a speech by the Fed Chair Powell who confirmed the strength of the US economy. Furthermore, the CPI for April met the forecasts of 2.5%. It is very likely that we will see a rate hike in the next few weeks. Right now not much is moving the dollar, so given the euro’s weakness, we expect the EUR/USD to continue declining.

In terms of the daily chart, today we have a pivot point for the pair located at 1.1950, and the pair is currently trading below it. We expect the EUR/USD to continue its decline, so look towards the nearby support levels at 1.1904 and 1.1877. If the pair starts gaining again, be aware of the resistances at 1.1977 and 1.2023. The indicators of technical analysis unanimously agree on a strong sell signal.