Today we would focus our analysis on one of the most popular tools among traders, the EUR/USD currency pair.
Last time we wrote about this pair we talked about how the euro is gradually recovering and taking on the dollar. The European currency met our expectations and managed to surpass the psychological level of 1.15, and still shows momentum. This Thursday ECB President Mario Draghi is set to give a speech and investors are convinced he would announce a new aggressive (hawkish) strategy for the euro, contrary to the current dovish, inflation-friendly stimulus policy. If this does indeed happen, we can expect a further strengthening of the euro and new highs for the EUR/USD. This is also somewhat boosted by investors’ expectations that in the United States the Federal Reserve would postpone an interest rate increase, which would additionally drag the dollar down versus the euro.
As we mentioned in our article yesterday, we have two important reports from the European Union today - the ZEW Economic Sentiment, both for Germany and the eurozone as a whole. On the American side we also expect some news, namely the housing market index and an import prices report. As the news comes in we can expect that the EUR/USD would be somewhat volatile.
It’s crucial to pay attention to the key levels for the EUR/USD. As of this morning, we had a clear resistance at 1.1510 and a further one at 1.1521. At the moment of this article’s publishing both levels have been overcome and the EUR/USD has risen by 72 pips to trade around 1.1550. Below the current price we have support levels at 1.1434 and 1.1423, but they seem too far off right now. All technical indicators agree in giving us a strong buy signal.
