Today we shall take a look at the EUR/USD currency pair. So far in January 2020, it seems that the pair is back to its 2019 tendencies, with the dollar heavily pressuring the euro. However, the pair’s decline softened before it pushed below 1.11 where it’s nearing a strong support level.
There is not much to help the European single currency strengthen at the moment. Last week’s key inflation data showed that economic growth is consistent with the forecasts, which is not bad per se, but the euro won’t rally until the results exceed investors’ expectations. With the conflict between the US and China hopefully moving towards a resolution, the outlook for the global economy will improve, which could be beneficial for the euro as well. This week we need to keep an eye on the German GDP data (Wednesday), the details from the ECB’s last policy meeting (Thursday), and, most importantly, the eurozone CPI on Friday.
On the other hand, the American dollar remains the strongest currency out there, and continues to exert pressure on the euro. Last week’s unemployment data showed that the rate is in line with the forecasts and did not shake the dollar’s position. Moreover, the signing of a trade agreement between the United States and China will be beneficial for the American economy and will allow the Federal Reserve to keep the current interest rates unchanged, which in turn boosts the dollar. That is, unless tomorrow’s inflation data from the US fails to meet the forecasts.
In terms of the daily chart, today we have a pivot point for the pair located at 1.1117, with the price currently trading above it. The daily support levels lie at 1.1112 and 1.1108. The daily resistances are located at 1.1121 and 1.1126. The indicators of technical analysis recommend a strong sell today.
