Today we would take a look at the EUR/USD currency pair. Over the past two months this instrument has experienced many ups and downs, but right now it seems to be heading upwards again.
Once again, the European single currency remains calm. The euro hasn’t been affected much by the trade dispute between the United States and China, nor has it been under the influence of any major events within Europe. However, there is a different problem for the euro: inflation is still lagging behind, despite the ECB’s efforts to promote economic growth. Yet the euro has remained strong. Some analysts are beginning to argue that the single currency is actually too strong for its own good; indeed, even the ECB has said that it would welcome a weaker euro. This is why in the long term we need to be wary of any further strengthening of the euro.
Meanwhile, the American dollar continues to face trouble. The US currency is under constant pressure due to the trade dispute with China. Still, this week started off with a bit less stress as the United States is awaiting statements by the Chinese president from an economic forum taking place today. In addition, the dollar is also awaiting some key economic data on inflation which would be published tomorrow, as well as the minutes from the Federal Reserve’s last meeting. The latter publication will have implications for the Fed’s plans for the near future and the next rate hikes expected, so likely the dollar will be very volatile tomorrow.
In terms of the daily chart, today we have a pivot point for the pair located at 1.2304. The pair is currently trading above it and we expect it to continue growing, so watch out for the resistances at 1.2348 and 1.2374. Alternatively, if the pair drops below the pivot (which isn’t very likely), pay attention to the support levels at 1.2278 and 1.2234.
