Today we would take a look at the EUR/USD currency pair. The pair was more or less flat last week, but since the weekend the EUR has been making upward strides again.
The euro has been under the influence of European Parliamentary elections since last week. As of last night the elections are over and now the EUR is steady due to the fact that far-right and eurosceptic parties did not do very well in the election. Previously analysts had feared that if the EU Parliament takes a far right turn, this would jeopardize the unity of Europe, but since centrist parties seemed to do better than the rest, this was good for the euro. Still, analysts are wary that the new government which will be elected by the new MEPs will be full of diverging opinions and will not be very unified. This year we would get a new European Council, European Commission, and a new President of the European Central Bank, the organ responsible for the monetary policy that shapes the course of the EUR.
The American dollar is not having the best time right now. Last week’s PMI and durable goods reports did not meet traders’ expectations and pushed the dollar away from the five-months’ maximum it had reached prior to the data releases. With the trade war between China and the United States still going strong, investors are concerned for the American economy and seem very confident that the Federal Reserve will have to lower interest rates for the first time in years in 2019, though this is still not confirmed. This week we expect data on the GDP and inflation in the United States which can tell us more about what the Fed is planning, but for now there is a slight weakness in the USD.
In terms of the daily chart, today we have a pivot point for the pair located at 1.1203, with the price currently trading slightly below it. The daily support levels lie at 1.1193 and 1.1179. The daily resistances are located at 1.1218 and 1.1227. The indicators of technical analysis are confident in giving us a strong buy recommendation.
