Today we would take a look at the EUR/USD currency pair. The price has been dropping all through February and is now trying to stabilize around the 1.13-1.14 level.
The European single currency is poised to continue weakening. The fundamentals from the eurozone have not exactly been stellar, and political uncertainty has also weighed heavily on the euro in the past year or so. Last week we got a signal from the European Central Bank that they are open to considering another round of financial injections to support the struggling economy and this week we would receive important inflation data. If the CPI proves disappointing, this will tip the scales in favor of more aggressive dovishness and would weaken the euro even more.
The American dollar, on the other hand, continues to perform well. This week we expect a speech by Jerome Powell, the chief of the Federal Reserve, which will offer more clues about the Fed’s monetary policy sentiment. Data has been good and reports about the trade negotiations with China are optimistic, which has led investors to have more confidence in the dollar and the US economy in general. This might pave the way for another interest rate increase.
In terms of the daily chart, today we have a pivot point for the pair located at 1.1339, with the price currently trading above it. The daily support levels lie at 1.1328 and 1.1315. The daily resistances are located at 1.1353 and 1.1363. The indicators of technical analysis are giving us a buy signal, but the moving averages disagree, so it is best to wait for a proper confirmation.
