Today we would take a look at the EUR/USD currency pair. The pair over the past three weeks has continued its steady downfall and we expect the bearishness to persist.
The euro has retreated from highs semi-permanently. The European Central Bank expected that by now its extensive stimulus program would have driven inflation healthily up, but instead the CPI continues to lag behind forecasts. Because of this the ECB is expected to continue its dovish policy, which would weaken the euro further.
Meanwhile, the American dollar finds itself in the complete opposite boat. Inflation in the United States is growing steadily, wages are increasing, and unemployment is going down. All of these are signs that the economy is healthy, and another interest rate increase is expected soon. The Dollar index is soaring and we expect the US currency to continue making gains against all major currencies.
In terms of the daily chart, today we have a pivot point for the pair located at 1.1857. We expect the EUR/USD to continue its decline, so look towards the nearby support levels at 1.1816 and 1.1781. If the pair starts gaining again, be aware of the resistances at 1.1892 and 1.1933. The indicators of technical analysis unanimously agree on a strong sell signal.
