Today we would take a look at the EUR/USD currency pair. The euro kept decreasing all throughout last week, but today it opened in the green.
The European single currency is widely expected to continue weakening. Last week the European Central Bank announced a new set of dovish measures to support the economy in the form of cheap bank loans, which are supposed to encourage spending and help inflation rise. Additionally, the ECB President Mario Draghi stated that the ECB’s previous forecast of possible rate hikes in the middle of 2019 no longer applies and likely there will not be a hawkish turn in their stance this year at all. The fundamental reports coming in today are somewhat disappointing, so we don’t see the EUR strengthening this week at all.
Meanwhile, the American dollar continues to benefit from its position as a safety asset. The Federal Reserve is taking a cautious course this year and has refrained from hiking interest rates any further, finding the American economy to be near its perfect balance. However, with global uncertainty and a still not finalized trade deal between the United States and China, investors still prefer to back the dollar as a strong investment tool, which contributes to its rising price.
In terms of the daily chart, today we have a pivot point for the pair located at 1.1235, with the price currently trading slightly above it. The daily support levels lie at 1.1227 and 1.1222. The daily resistances are located at 1.1240 and 1.1248. The indicators of technical analysis and the moving averages agree on a strong sell recommendation.