Today we would take a look at the EUR/USD currency pair. The pair recovered from the 1.10 low reached last week, but it’s still having trouble breaking out one way or the other.
The European single currency is still facing a mountain of pressure. Fundamental reports from the eurozone continue to miss the mark, showing signs of wear and tear from the global trade conflict, which has been bad for everyone. In addition, Brexit is also looming around the corner and it appears that the Prime Minister of the UK does not plan to even try to negotiate with the EU, so the bloc is preparing for a hard Brexit. The most recent source of negativity is Italy, where the government is calling for early elections. This added uncertainty is not allowing the euro to recover.
The American dollar is gaining strength by the day, to a large extent because it serves as a safety asset. The rising global trade risks is driving focus away from equities and into trading instruments such as the USD and the Japanese yen. However, the dollar could weaken tomorrow if CPI readings fail to meet the forecasts, which would increase the likelihood of a further loosening of the Federal Reserve’s monetary policy.
In terms of the daily chart, today we have a pivot point for the pair located at 1.1203, with the price currently trading below it. The daily support levels lie at 1.1198 and 1.1189. The daily resistances are located at 1.1212 and 1.1217. The indicators of technical analysis are mixed at the moment, but lean towards recommending a buy position on this pair.
