Today we shall take a look at the EUR/USD currency pair. At the end of last week, there was a sharp bullish tick in the rate of this pair, but this week it seems to be in the red again.
The European single currency continues to not be in a good position to strengthen. The uptick we witnessed on Friday was caused by doubt in the dollar (due to rising Federal Reserve interest rate cut expectations), not necessarily by positive factors intrinsic to the euro. Today there is an event organized by the European Central Bank in Frankfurt, which may tell us more about President Lagarde’s plans. She will also engage in a series of speeches this week, doing one in Paris on Wednesday, and Brussels on Thursday. Otherwise, the euro’s schedule for the week is not very busy, thus the currency won’t have many reasons to strengthen.
The American dollar is currently in a volatile position. On the one hand, it tends to strengthen when risk aversion is high because the reserve currency is a good safe haven (not as great as the JPY or the Swiss franc, but very reliable still). Nevertheless, the recent market sentiments, the spread of the coronavirus, and the economic difficulties China could face, have all soured expectations for growth. Now investors are near certain that the Federal Reserve will have grounds to cut interest rates once or twice more in 2020 as a preventative measure. This prospect is weakening the dollar at the moment.
In terms of the daily chart, today we have a pivot point for the pair located at 1.1089, with the price currently trading below it. The daily support levels lie at 1.1083 and 1.1075. The daily resistances are located at 1.1096 and 1.1103. The indicators of technical analysis are a bit mixed but lean towards recommending a sell position today.
