Today we shall take a look at the EUR/USD currency pair. Last week, the pair recovered some of its losses and successfully breached the psychologically important level of 1.10.
The European single currency still lacks any internal factors to support its strengthening. The European Central Bank is among the most dovish regulators in the world right now and will proceed with asset purchasing next month to support the eurozone’s economy. At the end of this week, there will be an EU summit. The gathering is supposed to yield a final decision on whether Brexit will be delayed, as well as a word on the bloc’s future expansion plans. Tomorrow we also expect the ZEW economic survey from Germany, which can either strengthen or weaken the euro.
There isn’t much going on with the dollar at the moment. This week will be relatively free of important fundamental data, with the notable exception of Wednesday’s retail sales report. Last week’s CPI data from the United States showed a decline in the inflation rate in September. This disappointment could possibly motivate another rate cut by the Federal Reserve to prevent an economic slowdown. However, such a measure will weaken the dollar.
In terms of the daily chart, today we have a pivot point for the pair located at 1.1031, with the price currently trading below it. The daily support levels lie at 1.1022 and 1.1016. The daily resistances are located at 1.1037 and 1.1046. The indicators of technical analysis lean towards a strong buy recommendation.
