Today we shall take a look at the EUR/USD currency pair. After dropping to two-year lows, the pair spent the past week in a price correction and is currently still rising in price.
The European single currency is likely going to continue having a difficult time. October marked the beginning of the fourth quarter of 2019, but investors remain unconvinced that the eurozone would do any better compared to the rest of the year. The European Central Bank recently signaled it is open to further dovishness to support the economy. The current risks associated with the US-China trade war, Brexit, and last week’s tariffs on European goods coming into the United States are all pressuring the euro. With disappointing fundamentals and weak inflation growth, we don’t see the single currency strengthening significantly anytime soon.
Meanwhile, the US dollar remains the most reliable currency on the Forex market. Despite the political trouble in the United States and the mixed signals that the Federal Reserve is sending to investors, the USD has so far been invulnerable. However, we do need to keep an eye on fundamentals, as reports from the US have been mixed in the past weeks. It is possible to see a further softening of the monetary policy, which may weaken the USD.
In terms of the daily chart, today we have a pivot point for the pair located at 1.0980, with the price currently trading above it. The daily support levels lie at 1.0975 and 1.0966. The daily resistances are located at 1.0989 and 1.0994. The indicators of technical analysis lean towards a buy recommendation.
