Today we would take a look at the EUR/USD currency pair. The pair spent most of last week growing, but declined over the weekend.
The situation with the European single currency is more or less the same. The European Central Bank continues with their dovishness and inflation is still far off the target levels which would allow the euro to strengthen. Last week’s bullishness was more due to the weaknesses of other currencies, not the euro’s own momentum. However, some of the euro’s losses were due to expectations that the German IFO data released today would fail to meet the overcasts, but it actually turned out to be better than expected. In a way, the EUR is already doing better than investors thought it would this week. Still, there will be a lot of volatility in the pair, as we wait to hear from the ECB this week, as well as more about Brexit’s new deadline, which will be determined by another vote in Parliament.
Last week the American dollar disappointed investors and gave up some ground amid higher unemployment rates and slowing economic growth. This data prompted the Federal Reserve to announce that we are not likely to see any more interest rate hikes in 2019 at all, a much more dovish turn than previously expected. The dollar quickly turned the losses into a correction, but this week we expect to hear about GDP growth in the United States, and if it is lower than expected, investors would rely on even further dovishness by the Fed.
In terms of the daily chart, today we have a pivot point for the pair located at 1.1299, with the price currently trading above it. The daily support levels lie at 1.1283 and 1.1269. The daily resistances are located at 1.1313 and 1.1329, and currently the first one has been overcome. The indicators of technical analysis are showing us mixed signals, but lean towards a sell recommendation.
