Today we shall take a look at the EUR/USD currency pair. Though the euro rallied last week, now it seems to once again show a weakness against the dollar.
The euro abandoned a 4-week upward trend against the dollar, largely because fundamental reports from the eurozone have failed to wow investors. Granted, data has not been as abysmal as previously feared. Nevertheless, there is no tangible incentive for the European single currency to strengthen. Even the change in the ECB’s leadership is not likely to produce a better economic result. Right now investors care about two main things: the risks of a no-deal Brexit (which has been averted, for now), and the new stimulus program, which starts next month. Perhaps the QE measures will be able to improve the economic health of the eurozone.
The dollar is a little quiet today, as investors buckle down for the Federal Reserve’s policy meeting on Wednesday. Several reports from the United States, including the CPI and retail sales, recently failed to meet the forecasts of investors. If the US and China are successful at signing a trade agreement, there may be hope for a natural recovery in the US economy. But until then (if that day comes to be at all), the Fed may need to cut interest rates once again to support the economy, which might weaken the USD.
In terms of the daily chart, today we have a pivot point for the pair located at 1.1082, with the price currently trading above it. The daily support levels lie at 1.1079 and 1.1075. The daily resistances are located at 1.1086 and 1.1089. The indicators of technical analysis lean towards a strong buy recommendation.
