Today we would take a look at the EUR/USD currency pair. The pair dropped to a two-year low last week, but now seems to be recovering some of the lost ground.
The European single currency doesn’t seem able to catch a break. With negative global sentiments posing risks for the euro, now the internal factors from within Europe are also not boding well. Italy, which until recently was giving the eurozone trouble with their budgeting decisions, is in the midst of another political squabble. Some are worried that the country might head into a new round of preliminary elections. Moreover, the Brexit risks are also increasing, so the euro is being pressured from multiple directions.
The American dollar is doing well despite the interest rate decrease implemented by the Federal Reserve last week. Typically, when a country lowers their interest rate, this also weakens the currency and increases inflation. However, the Fed slash was already priced in for weeks, it was just 25 basis points (against the predictions of some, which were at a 50 point cut), and there are no clues as to whether there will be another decrease anytime soon or if this one was enough. Thus the dollar remained strong. Moreover, the USD is being boosted as a safety asset due to the uncertainties associated with the deterioration of the trade talks between the US and China.
In terms of the daily chart, today we have a pivot point for the pair located at 1.1108, with the price currently trading above it. The daily support levels lie at 1.1101 and 1.1096. The daily resistances are located at 1.1113 and 1.1120. The indicators of technical analysis are confident in recommending a strong sell position on this pair.
