Today we shall take a look at the EUR/USD currency pair. The pair had a mild recovery last week but overall it still doesn’t seem poised for growth.
The euro right now does not have many incentives to strengthen. Last week the European single currency was able to make a slight headway against the USD due to the escalation in the trade conflict between the US and China. Because the trade war is far from a resolution and the Federal Reserve does not have a clear message regarding monetary policy, the dollar is in an uncertain position, giving the euro some breathing room. However, today’s publication of the German IFO business sentiment was negative, which is bad news for the eurozone’s economy. The ECB is expected to cut interest rates soon, so the euro will likely remain weak.
As mentioned above, the USD reacted negatively to the escalation in the trade war. China is hitting the US back with tariffs, while the States decided to implement a higher tariff than planned (15% instead of the 10% announced). This shows that despite what Trump keeps saying about wanting a deal, a trade agreement is very far off. Today we expect the durable goods orders from the US and if the report is worse than expected (1.0%), the dollar can weaken further.
In terms of the daily chart, today we have a pivot point for the pair located at 1.1150, with the price currently trading below it. The daily support levels lie at 1.1134 and 1.1124. The daily resistances are located at 1.1160 and 1.1176. The indicators of technical analysis are confident in recommending a strong sell on this pair.
