Today we would return to the EUR/USD currency pair. It continues to be quite volatile, though it has recovered slightly compared to last Monday.
In all seriousness, things are not looking too great for the euro right now. The European Central Bank is committed to a dovish monetary policy and would not provide any incentives for the growth of the single currency. While this is not new, the pressure on the euro is increasing because the United States is consistently moving in the opposite direction with regular interest rate hikes. With the current risks coming out of Turkey, the euro is definitely feeling the pressure and we expect it to drop again.
The American dollar is moving in the opposite direction. The economic fundamentals from the United States are stable. Today we expect the minutes from the FOMC meeting held on August 1, which are of high importance since we can get a solid hint as to when the next rate increase would happen. So far analysts have been betting on a September hike. As we approach it, we are likely to see a further strengthening of the dollar.
In terms of the daily chart, today we have a pivot point for the pair located at 1.1438. We expect the EUR/USD to continue declining, so pay attention to the nearby support levels at 1.1438 and 1.1431. The daily resistances are located at 1.1441 and 1.1445, but we do not expect the pair to touch them today. The indicators of technical analysis and moving averages agree on a strong sell recommendation.
