Today we would take a look at one of the most popular instruments among traders, the EUR/USD currency pair. Despite a lot of volatility toward the second half of 2017, the EUR managed to take the lead in the last few weeks and earlier today finally passed the level of 1.20.
We should note that nothing new has happened that would affect the pair. The euro is still growing based on positive economic statistics from the eurozone. Later this week we expect a statement from the European Central Bank on inflation forecasts. This kind of report will be one of the key things to watch in 2018 as rapidly rising inflation will be a sign for the ECB to start moving away from dovishness and switch to a more hawkish monetary policy, which will boost the euro further.
Nothing new in the United States either, as the markets are still sluggish after the holidays. Neither the December rate hike, not the adoption of tax reform managed to strengthen the American dollar. With Robert Mueller’s investigation into Russia’s involvement in Trump’s election as president intensifying, a dark cloud is hanging over the White House. 2017 proved that political problems in the United States drag the dollar down and this is likely to also be the case in 2018.
In terms of the daily chart, today we have a pivot point at 1.2006, around which the price is currently trading. If the euro manages to prevail, look for the price touching the nearby resistances at 1.2014 and 1.2019. If the prices fall below the pivot, then we can look for a retreat back to the support levels at 1.2001 and 1.1993. The indicators of technical analysis agree on a strong buy opportunity.
