Today we would take a look at the EUR/USD currency pair. The price recovered a little in February, but is now once again decreasing.
The European single currency does not have many incentives for growth at the moment. Last week the German YoY CPI was better than expected and the French GDP data met forecasts, but this did not affect the euro significantly. This week there will be a policy meeting of the European Central Bank, which is key. The most recent inflation data indicates that the ECB will almost certainly be looking into more dovish policies, possibly even another stimulus package in order to support the economy and encourage inflation growth. Against this background we have to expect a further weakness in the euro.
The American dollar, on the other hand, is feeding positively off of global news. The world economy right now is taking a deep breath due to the promising news about the trade negotiations between the US and China. Fundamentals in the US were somewhat lukewarm last week, but with more reports coming in this week we expect that the dollar will prove resilient. It is still enjoying the image of a safety asset, which is contributing to the dollar’s strengthening.
In terms of the daily chart, today we have a pivot point for the pair located at 1.1380, with the price currently trading below it. The daily support levels lie at 1.1365 and 1.1355. The daily resistances are located at 1.1389 and 1.1405. The indicators of technical analysis are giving us a somewhat hesitant sell signal, but the moving averages agree on a strong sell recommendation.
