Today we would take a look at the EUR/USD currency pair, a favorite instrument among our traders.
The pair will be quite interesting this week, as we have important events that will influence both currencies, and with that, the exchange rate between the two. In Europe arguably the most important event are the parliamentary elections in Germany this Sunday. If Angela Merkel manages to secure another round as chancellor of Germany, the euro has the potential to grow further, since Merkel is a driving force for the stability and prosperity of the European Union. The American dollar is up for some news too, as we expect important decisions from the Federal Reserve today and tomorrow regarding the monetary policy of the United States.
In terms of the daily chart for the EUR/USD pair, today we would keep a bearish outlook, as the pair has dropped a bit and we suspect it would drop further. There is a strong resistance at 1.1994 that may not be overcome today. Instead, we believe the pair will move further down and flirt with the support level at 1.1838. Our strategy is confirmed by the stochastic indicator. That’s why the best option right now is to place sell positions below 1.1994, with a stop-loss at 1.2035 and a take-profit order at the support 1.1838.
