Today we shall take a look at the EUR/USD currency pair. In recent days, the pair seems to have formed three peaks with gradually lower maximums; right now we might be at the turning point of the third one, with the trend likely to become bearish again.
The overall outlook for the European single currency right now is bearish because Europe has become the site of much conflict. Eurozone countries are in a disagreement about the measures they need to take to protect the union’s economy from the worst of the coronavirus damage. As mentioned before, Germany, the Netherlands, Austria, and Finland are taking a more conservative approach and recommending careful bailout plans for the countries that have been hit the hardest by the pandemic. On the other hand, Spain, Italy, and France (who are the countries in question) have asked for more liberal aid with fewer strings attached. Due to the failure of last week’s conferences to reach a compromise, there is no clear path of financial support for the eurozone at the moment, which is weakening the euro.
The United States, however, has been confident in taking measures to support its economy without wasting much time. Last week’s report on initial jobless claims was worse than expected, repeating the catastrophic results of the previous week. Still, the Federal Reserve immediately took action and announced another massive stimulus package. Both the central bank and the government have been supportive of digging deep into their pockets in order to ensure the economic well-being of American businesses and private citizens. Thus, the USD is much better supported, despite the fact that the United States is experiencing the worst Covid-19 outbreak in the world.
In terms of the daily chart, today we have a pivot point for the pair located at 1.0938, with the price currently trading closely below it. The daily support levels lie at 1.0925 and 1.0917. The daily resistances are located at 1.0945 and 1.0959. The indicators of technical analysis are mixed but overall recommend a buy position today.
