Today we would take a look at the EUR/USD currency pair. The pair has been declining since the beginning of August and continues to move downward even today.
As previously established, the euro does not have many incentives for growth. The European Central Bank has confirmed multiple times that interest rates won’t be increased at least until the middle of next year, so there will be no monetary policy changes affecting the single currency for the foreseeable future. Data released today in the eurozone did not meet the forecasts of analysts. Moreover, last week’s GDP data also missed the target, which is what tipped the scales for the euro in the first place. There are no important statistics published this week, nor speeches by officials, so we do not expect the euro to strengthen.
The American dollar is still well-supported by fundamentals from the United States. Recently the Federal Reserve took into account all of the positive developments in the United States (despite the possible risks entailed by the trade war with China) and confirmed that based on the economy’s current strength, there will be two more interest rate increases this year, instead of the one planned. This further boosted the reserve currency.
In terms of the daily chart, today we have a pivot point for the pair located at 1.1565, with the pair currently trading below it. We expect the EUR/USD to continue declining, so pay attention to the nearby support levels at 1.1558 and 1.1554. The daily resistances are located at 1.1569 and 1.1576, but we do not expect the pair to touch them today. The indicators of technical analysis and moving averages agree on a strong sell recommendation.
