Today we shall take a look at the EUR/USD currency pair. Last week, the euro somewhat surprisingly gathered steam and managed to push the pair above the 1.11 level, where it still remains today.
Normally, we don’t see any factors in favor of the European single currency. Its recent strengthening came due to the political developments in the United Kingdom, where Boris Johnson won the election. His win means that Brexit will likely be resolved with a deal next month, eliminating a lot of the uncertainty the issue previously created. Moreover, an ECB meeting last week confirmed that the bank will hold a steady course for now, so we are keeping a neutral outlook for the euro.
Last week brought some mixed results for the American dollar. Inflation data was good, offering a strong reassurance that the Federal Reserve might not need to touch interest rates in the foreseeable future. However, we did see some decreases in retail sales, one of the indicators that suffers the most due to the trade war between the US and China. Nevertheless, there has been positive news on that front, with Donald Trump confirming the two sides are close to a deal. This has reassured markets and driven risk appetite, drawing attention away from the USD for the time, allowing it to relax.
In terms of the daily chart, today we have a pivot point for the pair located at 1.1127, with the price currently trading above it. The daily support levels lie at 1.1119 and 1.1114. The daily resistances are located at 1.1132 and 1.1140, both of which have been overcome. The indicators of technical analysis recommend a strong buy today.
