Today we shall take a look at the EUR/USD currency pair. Since last week, the price of this pair has gradually risen, as the dollar is weakening against the euro, allowing the pair to reach levels about 1.10 once again.
The European single currency right now is surprising investors. Recent fundamental data from Europe has been lukewarm, the forecasts being met without any significant improvements. Considering that and the spread of the coronavirus throughout Europe, it seemed unlikely that the euro would strengthen, but it did. Right now investors seem more concerned about the weakening of the US dollar caused by a drop in Treasury yields, which in turn is permitting the euro to take a deep breath and climb upwards. This week will be rich in news surrounding the euro. Tomorrow we expect the eurozone CPI readings, while later in the week there will be data on Italy’s GDP, retail sales, factory orders, and more. Furthermore, this week the EU and the UK are finally beginning the negotiations about their future relationship.
As mentioned above, the US dollar currently is weaker than usual due to recent changes in Treasury yields, which may indicate the county is headed for a recession. Still, economic data from the States remains positive, so an actual recession might not come to be. But as long as the warning for one is present, investors will fear a further loosening of the Federal Reserve’s monetary policy, which in turn weakens the dollar. Today we expect the employment and manufacturing ISMs which may offer a short-term boost to the USD, if they are better than expected.
In terms of the daily chart, today we have a pivot point for the pair located at 1.1055, with the price currently trading above it. The daily support levels lie at 1.1036 and 1.1019. The daily resistances are located at 1.1072 and 1.1091. The indicators of technical analysis strongly and unanimously recommend a buy position today.
