Today we shall take a look at the EUR/USD currency pair. After a bold rally at the beginning of June, now the pair has rebounded from a strong resistance level and the trend has become bearish again.
Despite observing a few losses over the last couple of days, the outlook for the euro remains generally positive. The euro’s rally began when Europe began unveiling possible stimulus plans - one by France and Germany, and another one by the European Commission. Implementing at least one of these, even in a revised form, would greatly benefit the economies of countries in the European Union. Investors might be getting slightly apprehensive now because EU leaders will gather this Friday to discuss the stimulus proposals. If EU member states fail to reach a compromise, the euro could weaken again.
At present, the US dollar is losing its positions against most major currencies due to one reason only - a lack of demand for safe haven investments. The dollar has cemented itself as the most reliable, high-liquidity tool to seek in times of crisis. With tensions between the US and China, as well as increasing fears of a second wave of the coronavirus pandemic, specifically in China and the United States, there is a probability that the dollar will strengthen again. However, the financial markets are still stable for the moment. More information will be needed for the situation to change.
In terms of the daily chart, today we have a pivot point for the pair located at 1.1245, with the price currently trading above it. The daily support levels lie at 1.1233 and 1.1215. The daily resistances are located at 1.1263 and 1.1275. The indicators of technical analysis are confident in strongly recommending a buy position today.
