Today we would take a look at the EUR/USD currency pair. July has been good to the euro, as the single currency was able to make steady gains over the past week.
The growth of the euro is quite moderate and is mostly supported by economic reports, since in the long term traders know the European Central Bank will remain quite dovish towards the single currency. Today the trade balance of Germany for the month of May was released and it was better than expected. We expect a couple of more reports from the eurozone regarding the economic sentiment for July, as well as an important speech by ECB President Mario Graghi in Brussels. These reports could increase volatility in pairs containing the euro. Overall, today should be a good day for the single currency.
Meanwhile, the American dollar is starting to lose steam amid global trade war concerns. Last Friday tariffs between China and the United States came into effect. The markets are not giving too much traction to the China-US dispute. However, since the European Union, Canada, and Mexico are also targeted, it would be much more interesting to see how their retaliation will affect the US economy. This week we expect the June CPI report and a new report by the Federal Reserve, and these events will tell analysts more about where the dollar is heading.
In terms of the daily chart, today we have a pivot point for the pair located at 1.1750, with the pair currently trading above it. We expect the EUR/USD to continue rising today, so pay attention to the nearby resistances at 1.1761 and 1.1768, as the pair is quite close to them. In case today’s reports affect the euro negatively, be aware that the daily support levels are located at 1.1746 and 1.1739. The indicators of technical analysis agree on a strong buy recommendation, as do the moving averages.
