Today we would examine the EUR/USD pair once more. This trading instrument has had its ups and downs lately, with lots of news from both the United States and the European Union affecting the pair.
In terms of the euro, last week we heard from the European Central Bank regarding their end-of-the-year plans and what they have in mind for 2018. While some traders were disappointed to learn that the ECB doesn’t seem to plan any interest rate increases in 2018, it is worth noting that the euro has been doing well even without the central bank’s involvement. With positive economic reports and the gradual recovery the ECB is overseeing, the euro is likely to continue to be well-supported next year and keep its positions high.
On the other hand, the situation for the American dollar is quite different. Last week the Federal Reserve implemented its fifth interest rate increase since 2008 and updated its forecasts about economic growth and a lowering of the unemployment rate. However, the dollar seemed to respond in the opposite way - instead of rallying on the new hawkish measures, it declined against most currencies. It is possible that this was due to investors being overconfident in the hike and doings lot of profit-taking on that day, or even due to doubts that the Fed is not hawkish enough. The political problems in the US are also a destabilizing factor for the dollar.
While each currency seems quite neutral at the moment, our outlook for the EUR/USD is bullish. On the daily chart today we have a pivot point located at 1.1787. The pair is currently trading above it, so we might see it touch the nearby resistances at 1.1832 and 1.1879. If the pair happens to drop below the pivot, then look towards the support levels at 1.1740 and 1.1695. While the indicators of technical analysis are giving us mixed signals with a small preference for sell positions, the moving averages are much more confident in giving us a buy signal.
