Further bearishness is expected so we recommend a strong sell.
Today we would take a look at the EUR/USD currency pair. The pair has been in a downward trend since the middle of October and that seems to be the case still.
After last week’s European Central Bank meeting did not bring any surprises for investors, the euro remained unaffected. The ECB is continuing with their plans to end stimulus and not to touch interest rates until at least the middle of 2019. This means there isn’t much that investors can count on in the near future to boost the euro. Meanwhile, the issues with Italy’s budget continues. In fact, ECB President Mario Draghi spoke about the possibility of starting a different stimulus program in case Italy causes trouble for the eurozone, which further weakened the euro. On Wednesday we expect some inflation data for the EU, but that’s the only key report this week, otherwise the EUR will be affected by political news.
The American dollar is hardly surprising anyone in going strong. The strong economy of the United States is naturally supporting the reserve currency, which is also attracting interest as a safety asset amid all of the insecurity on the financial markets. This week we expect a bunch of reports in the US which will likely boost the USD even further; among these are data regarding the labor market and wage growth.
In terms of the daily chart, today we have a pivot point for the pair located at 1.1399; though the pair is currently trading slightly above it, we expect it to decline. The daily support levels lie at 1.1394 and 1.1388. The daily resistances are located at 1.1405 and 1.1410. We expect the price to continue falling today. The indicators of technical analysis are confident in giving us a strong sell recommendation.
