After giving in to the dollar over the last two weeks, the euro finally perked up last night and today opened at around $1.1830. What’s in store for the EUR/USD pair today? Let’s find out!
If you have been following our economic reviews, you already know that today we have a major event from the eurozone - a press conference of the European Central Bank. During this meeting we expect an announcement regarding the future monetary policy of the European Union, most notably whether the ECB will cut down its stimulus package for 2018. If major cuts are announced, this would signify a less dovish approach, which would support a rally for the euro.
However, pressure is rising again in Catalonia, who seem firm in their intention to announce independence from Spain. If that happens, the euro will suffer.
In addition, in the United States we have some fundamental events influencing the dollar. Donald Trump recently came under open criticism from senators from his own party and was reproved by them as inconsistent, impulsive, and overall damaging for the image of the United States on the international political scene. If Trump loses the support of the Republican Party, it is unlikely that he would be able to enact any policies, such as the tax reform planned for 2018. We also expect the Q3 GDP of the US tomorrow, which would be a determining factor in whether or not there is rate hike in December. The dollar could strengthen once more if John Taylor is chosen as the next head of the Federal Reserve, since he is known for his hawkish stance on policy.
In terms of the pair’s daily chart, we have a pivot point located at 1.1798. Currently the pair is trading above it at 1.1814. If the upward movement continues, expect the pair to hover around the daily resistance levels at 1.1843, 1.1865, and 1.1910 (if the news for the euro is really good). Should the euro drop below the pivot, then watch out for the supports at 1.1776, 1.1731, and 1.1709. Right now the technical indicators are a bit mixed, but mostly leaning towards buy signals.
