Today we shall take a look at the EUR/USD currency pair. On Friday, the pair suffered a more significant drop but the decline did not last and it did not fall below 1.10. Now we see it in the green once again.
Given the current sentiments in Europe, as well as the global financial markets, we see the euro as neutral right now. This week we don’t expect any major events that can impact the euro, besides tomorrow’s ZEW economic survey, and, most notably, the last policy meeting of the European Central Bank for 2019, which would take place on Thursday. The ECB will likely remain patient and wait to see if fundamentals are improving more steadily before taking action. Recent economic reports from the eurozone have been better than expected, but amid the high risks to the global economy caused by the trade war between China and the United States, it is too early to talk about a recovery.
This week we expect a wide range of fundamental reports from the United States such as the CPI and retail sales readings, which would likely affect the course of the USD. The Federal Reserve will also hold a policy meeting. Investors expect that the Fed would not make any changes to its policy right now and confirm once again that there will be no more rate cuts, unless the economic situation in the US worsens. The progress in the trade negotiations with China has been the main factor affecting investors’ perception of the strength of the US economy; if talks continue going well, we expect the USD to appreciate.
In terms of the daily chart, today we have a pivot point for the pair located at 1.1058, with the price currently trading above it. The daily support levels lie at 1.1055 and 1.1052. The daily resistances are located at 1.1061 and 1.1064. The indicators of technical analysis recommend a strong buy today.
