Today we’d look into the EUR/USD trading instrument. The pair has had an interesting few months - 2017 began with widespread speculation that between the weakening euro and the strengthening dollar we’d meet in the middle and see perfect parity before the year’s end. However, this hasn’t been the case and lately we’ve seen the opposite, though in milder terms - a slight strengthening of the euro versus a somewhat weaker dollar. Even though the euro lost some of its momentum over the weekend, our outlook for it remains positive. We might see some gains today as the markets in the United States are on a break for the Independence Day celebrations. The euro is very close to the psychological level of 1.14. We have been getting data about the European economy that’s been consistently positive, including the most recent PMI report. A contributing factor to the strengthening of the euro is the calming of political sentiments across the union, most notably the favorable results from the elections in France, as well as the ECB’s recent indication that the stimulus plan might be gradually brought to an end sooner than expected. In contrast, the political climate in the US has been turbulent all throughout Trump’s presidency so far and despite steady data about the American economy, investors have lost their trust in Trump due to his unpredictability.
In light of all this, we expect the EUR/USD to remain bullish in the short and medium terms. We should keep an eye on the nearby resistances at 1.1409 and 1.1420. Should anything go wrong, we could potentially see the pair flirt with the support levels at 1.1333 and 1.1322, but it likely won’t drop below that. As of the moment of this article’s publication the EUR/USD is trading around 1.1351, inching closer to the support levels mentioned above. Right now most technical indicators agree on a strong sell signal.
