Today we shall take a look at the EUR/USD currency pair. After a massive drop at the end of August, the pair seems to have recovered slightly and is now holding steady near the 1.10 level.
The euro right now leans towards neutrality. This stabilization is like the quiet before the storm, as investors are preparing for the policy meeting of the European Central Bank this week. The ECB is expected to announce an interest rate cut that will bring interest below 0, most likely by 20 basis points. In addition, the bank might also reveal a new stimulus plan that involves aggressive quantitative easing, though some analysts speculate that the ECB might hold off on this at first, waiting out to see how Brexit is going to play out. Earlier today we also received a trade report from Germany that was better than expected, so the euro will likely remain steady today.
The US dollar remains strong. The American currency is backed by positive economic reports. The only possibility for it to weaken is if the Federal Reserve confirms that they are considering another interest rate decrease this month. Previously, analysts were almost certain the Fed will slash rates at the end of September, but now they don’t seem so sure. If the Fed does not, then the USD will likely strengthen.
In terms of the daily chart, today we have a pivot point for the pair located at 1.1023, with the price currently trading below it. The daily support levels lie at 1.1018 and 1.1014. The daily resistances are located at 1.1026 and 1.1032. The indicators of technical analysis are mixed at the moment but lean towards recommending a sell position.
