Today we would take another look at the EUR/USD currency pair. From around the middle of December the euro began to rally against the dollar and soared around 1.20 right after we entered 2018. However, as of this week the dollar has begun to recover some of its lost positions.
Right now we do not see many factors that can have a significant impact on the euro. Some reports are expected this week, such as the retail sales for November, as well as the latest statistic on the unemployment rate in the eurozone. Both of these can only slightly boost the single currency; more can be expected from the ECB’s meeting this Thursday. Nevertheless, a change in the ECB’s monetary policy is unlikely to come in 2018. While the European economy is doing quite well, right now we don’t see many factors that can stimulate the euro to gain further on major currencies.
Similarly, the American dollar is also a bit difficult to gauge at the moment. We know that three interest rate increases are planned for 2018 and this hasn’t changed. However, this is not really providing more support. Instead, the dollar is subject to political shocks and the impact of the recently-adopted tax reform on US Treasuries.
Overall, the outlook for the EUR/USD today looks neutral. We do have a pivot point for the pair on the daily chart, and that is located at 1.1993. The pair is likely to remain below the pivot as traders are settling the gains from their older deals on the pair, so watch out for the support levels at 1.1934 and 1.1898. If somehow the dollar manages to lose support, then we might see the pair touch the resistances at 1.2029 and 1.2088 again, though we don’t think this is very likely today. The indicators of technical analysis are offering a mixed prognosis, but our overall expectation is for a bearish movement of the pair.
