Today we would take a look at the EUR/USD currency pair. The pair spent all of last week declining, but seems to have opened this week in the green.
The economic situation in Europe remains unchanged. Fundamentals are not ideal and inflation is dragging behind target; the fallout of the global economic slowdown, in large part caused by Trump’s tariff plan, has also affected the eurozone negatively. Last week the European Central Bank chose to keep interest rates at 0.00%, just as expected. Today ECB President Mario Draghi will speak before the European Parliament regarding the future economic policy of the central bank. Based on the current situation on the markets, it is expected that he will confirm that the ECB will stick to dovishness. Thus, we do not see any factors in the near future that may lead to the euro’s strengthening.
The American dollar is somewhat difficult to read right now. There are many events this week, such as a major Brexit vote in Europe, and a policy meeting by the Federal Reserve in the US; on account of the high risk this week the dollar may be a bit neglected in favor of other, safer instruments such as gold and the JPY. However, fundamentals from within the United States remain good. Even the political climate is a bit calmer this week, since a temporary solution to the government shutdown was found.
In terms of the daily chart, today we have a pivot point for the pair located at 1.1409, with the price currently very near, slightly above it. The daily support levels lie at 1.1403 and 1.1394. The daily resistances are located at 1.1418 and 1.1424. The indicators of technical analysis are giving us a very mixed picture right now, leaning towards a sell, while the moving averages remain neutral.
