Today we would take a look at the EUR/USD currency pair. The pair continues to oscillate without certainty in a narrow corridor between 1.1726 and 1.1630.
Today the euro will likely be under the influence of economic reports from Germany, the EU’s strongest economy. The key reports to look forward to with high importance are the yearly and monthly CPI, as well as unemployment reports: these are the two most important factors to measure inflation in Germany, and thus have an impact on inflation throughout the eurozone as a whole. As previously established, we do not expect any changes in the monetary policy of the ECB who repeatedly stated that an interest rate change cannot happen before the summer of 2019. Until then the only incentives for a growth in the euro will be found around rising inflation and lowering unemployment reports.
On the other hand, the dollar continues to be supported by solid economic data. Just last week the Q2 GDP report came in at 4.1%, which is the highest economic growth in four years. This week we would hear from the Federal Reserve, but analysts don’t expect a rate hike so soon, since there was one last month. Instead, there is an 80% chance of a rate increase in September. In any event, we expect the dollar to remain strong.
In terms of the daily chart, today we have a pivot point for the pair located at 1.1658, with the pair currently trading below it. We expect the EUR/USD to be a bit volatile today, so pay attention to the nearby resistances at 1.1661 and 1.1664. In case the dollar starts growing again, be aware that the daily support levels are located at 1.1655 and 1.1652. The indicators of technical analysis show a buy signal; the moving averages are neutral.
