Today we shall take a look at the EUR/USD currency pair. Over the weekend, the pair dropped below the level of 1.10 and remains near 3-week lows.
The European single currency is poised for more losses, or so it seems. The European Central Bank recently loosened its monetary policy, which puts the euro at a disadvantage compared to currencies that are regulated by less dovish central banks, such as the US dollar and the Federal Reserve. Moreover, economic data from the eurozone continues to disappoint investors and indicate a recession is in the making, at least for as long as uncertainties such as the Sino-American trade war and Brexit persist. Today the ECB’s President Mario Draghi will speak before the European Parliament, hopefully revealing more about the ECB’s plans. Draghi is stepping down from his post at the end of October, so this will be his last appearance before the EU parliament.
On the other hand, the US dollar remains strong. Even though last week the Federal Reserve implemented a new rate cut, the dollar retained its positions. Right now the US and China are in the process of restarting their negotiations but if investors lose confidence in the two countries’ ability to resolve their conflict once again, we expect the USD to strengthen. In addition, this week there will be data on the US GDP which may further support the dollar.
In terms of the daily chart, today we have a pivot point for the pair located at 1.1016, with the price currently trading below it. The daily support levels lie at 1.1012 and 1.1006. The daily resistances are located at 1.1022 and 1.1026. The indicators of technical analysis are confident in recommending us a strong sell position.
