Today we shall take a look at the EUR/USD currency pair. Last week the pair was markedly bearish, but today the rate opened in the green once more.
This week the euro will remain under the influence of fundamental factors and political events. There are no surprises expected in the ECB’s policy; the markets don’t even seem particularly concerned about the upcoming elections in Spain. However, there is a reading on Germany’s GDP coming up, as well as inflation reports that will indicate what the current health of the European economy is like. Moreover, investors will keep an eye on the trade negotiations between China and the United States, as positive developments there translate into a hawkish policy in the United States and weaken the euro.
There will also be plenty of data to affect the US dollar this week. Retail sales and inflation rates are without a doubt the most important indicators for traders watching the dollar this week. The prolonged trade war with China has meant economic growth is slower everywhere, including the United States, where the last few inflation reports missed out the 2.0% target of the Federal Reserve. With the recent developments in the negotiations between the United States and China, investors hope to see an improvement in inflation, which would mean a more hawkish Federal Reserve policy, and will bolster the USD.
In terms of the daily chart, today we have a pivot point for the pair located at 1.1022, with the price currently trading above it. The daily support levels lie at 1.1019 and 1.1016. The daily resistances are located at 1.1025 and 1.1028. The indicators of technical analysis are leaning towards a sell recommendation today.
