Today we shall take a look at the EUR/USD currency pair. The pair traded choppily last week and is opening the new trading week at around 1.1570, which is a two-week minimum.
The European single currency is not a position to strengthen against the US dollar at the moment. Last week’s meeting of the European Central Bank did not change expectations either way, with investors still convinced that the ECB will keep the dovish course going for a long while. In addition, economic growth forecasts from Germany were revised lower, and today’s retail sales from the EU’s strongest member state disappointed investors. With these factors in mind, the euro is set to remain weak under the ECB’s ultra loose monetary policy.
As for the US dollar, it is facing another big week. This Wednesday, the Federal Reserve will give a press conference after its monthly monetary policy meeting, which might be the most important Fed meeting of the year. For months now investors had bet that the regulator will start tapering asset purchases from this month onward. Chairman Jerome Powell has certainly promised that bond buying will end by the middle of 2022, and with a gradual unwinding of asset purchases in mind, it has to begin soon. However, inflation data from the US has been a bit below the forecasted levels lately, and unemployment remains a concern for the Fed, so now the long-awaited hawkish move is not completely certain. Thus, the US dollar will stay volatile in the days leading up to the announcement.
In terms of the daily chart, today we have a pivot point for the pair located at 1.1559, with the price currently trading above it. The daily support levels lie at 1.1553 and 1.1549. The daily resistances are located at 1.1569 (overcome) and 1.1573. The indicators of technical analysis strongly agree in recommending a sell position today.
