Today we would take a look at the EUR/USD currency pair. After dropping significantly last week, the euro made a recovery over the weekend and the price of the pair is currently rising.
The euro’s most recent drop is due to the European Central Bank’s most recent statements regarding their monetary policy. While the ECB confirmed that their QE measures will decrease gradually and end this year, this statement was paired with a dovishness regarding the interest rate, which they do not plan on increasing anytime soon. This week we expect important information on inflation rates in Germany and the eurozone as a whole. If inflation numbers meet the forecasts, then the euro is likely to remain stable, though it only has a limited potential for growth.
The USD, on the other hand, continues to be supported by positive data, as well as the recent interest rate increase implemented by the Federal Reserve. However, right now the American currency is pressured by political factors, most notably President Trump’s trade dispute with China, which many analysts have termed a trade war. The exact economic outcome from the trade issue is not certain, but the fact that the United States will be slapped with tariffs from China, Canada, the European Union, and Mexico is likely to have a significant impact on the economy.
In terms of the daily chart, today we have a pivot point for the pair located at 1.1664, with the pair is currently trading above it. We expect the EUR/USD to perhaps at least slightly, so pay attention to the daily resistances at 1.1678 and 1.1683, above which the pair is trading right now. The daily support levels are located at 1.1655 and 1.1650. The indicators of technical analysis show mixed signals, so right now it’s best to wait for more data before we can open a position.
