Today we shall take a look at the EUR/USD currency pair. Though the pair has clearly exhibited some ups and downs, the general trend since the end of June has been an upward one, with the euro still trading above 1.13 at present.
Currently, investors cannot help but take a neutral view of the European single currency. This euro’s fate this week will be decided by entirely fundamental factors. First, there is the ECB policy meeting this Thursday - this is important but, at the same time, no surprises are expected. More importantly, this week there will be another EU summit where the heads of the governments of the bloc’s member states will debate whether to accept the European Commission’s proposed recovery fund. That form of stimulus will be the most important consideration for the euro, as more stimulus would mean better support for the currency, and the EUR will certainly grow. Then again, there is strong resistance against the proposal by the more debt-conservative EU members, so it remains to be seen what would happen to the proposal.
The dollar, on the other hand, continues to be mostly under the influence of the coronavirus pandemic and global reports on economic growth and recovery. As a safe haven, the USD gains in value whenever the pandemic seems too stubborn to die out, or when reports assessing the global economy prove worse than anticipated. So far today we have seen slightly more optimism on the markets, despite the rapid spread of Covid-19 in several regions. Last week the stock markets performed quite well in the end, which helped decrease the demand for safe assets and weakened the dollar. This sentiment could very well continue this week.
In terms of the daily chart, today we have a pivot point for the pair located at 1.1308, with the price currently trading above it. The daily support levels lie at 1.1299 and 1.1289. The daily resistances are located at 1.1317 and 1.1327. The indicators of technical analysis are the slightest bit mixed but still strongly recommend a buy position today.
