The price has sunk to 17-month lows and will remain bearish.
Today we would take a look at the EUR/USD currency pair. The euro briefly recovered in the lull preceding the midterm elections in the United States held last Tuesday, but as soon as the results started coming in, meeting the forecasts, the dollar began strengthening again, pushing the euro to its lowest level since June 2017.
Currently we expect the euro to weaken against other currencies. This week we expect key fundamental data about the European economy which is likely to be lukewarm at best and would not support the euro that much. These reports include data on the GDP, as well as inflation for October, both of which are of high importance for pairs with the EUR. More importantly, the euro remains under pressure due to the budgetary issue with Italy, which still has not been resolved. Until the EU and the Italian government agree on a spending plan which does not endanger the eurozone economy, the euro will remain under a lot of stress. Moreover, Brexit is yet another source of insecurity, since no progress has been made in the negotiations.
Things are completely opposite with the American dollar. The USD rallied after the midterm elections results confirmed a win for the Democratic party, which is expected to bring more political stability to the country, since Donald Trump would likely not be able to make snap policy decisions anymore, now that the Congress is not so heavily Republican. The Federal Reserve also expects a smoother sailing ahead, so analysts are confident about a rate hike in December, as well as at least three rate increases in 2019. This, along with positive economic reports, is making the USD soar.
In terms of the daily chart, today we have a pivot point for the pair located at 1.1323, with the price currently well below it. The daily support levels lie at 1.1301 and 1.1308, but the price is below both of them right now. The daily resistances are located at 1.1331 and 1.1338. We expect the price to continue falling today. The indicators of technical analysis and the moving averages are confident in giving us a strong sell recommendation.
