Today we would take a look at the EUR/USD currency pair. Although the pair dropped massively in August, the euro has been stabilizing little by little and is currently taking back the previously lost ground.
Right now the general outlook for the euro remains neutral. The European Central Bank is maintaining a steady course and currently there is no contagion from Turkey. This allowed the euro to appreciate against safe-haven currencies like the American dollar and the Japanese yen over the past week. However, right now the European single currency is facing new pressure from Italy, a country that is also facing some financial trouble. The CPI reports from today regarding inflation in the eurozone met the forecasts.
The American dollar remains well-supported by positive economic reports. The ground it gave up last week wasn’t so much due to any inherent weakness of the USD, as much as it was caused by lower risk appetite from investors. However, the American dollar is likely to strengthen in the near future, since we expect an interest rate increase by the Federal Reserve this month.
In terms of the daily chart, today we have a pivot point for the pair located at 1.1626. The daily support levels lie at 1.1619 and 1.1615. The daily resistances are located at 1.1630 and 1.1637, with the pair currently trading well above them. The indicators of technical analysis and the moving averages agree on a strong buy recommendation.
