Today we would take a look at the EUR/USD currency pair, which is one of the most popular trading instruments. The pair has been falling continuously over the past few weeks, but is there anything that can cushion the blow and slow the decline in the near future?
The European single currency will likely continue to lose positions. Inflation is lagging behind the European Central Bank’s targets and dropped from 1.5% to 1.2% yoy in April, with core inflation also dropping from 1% to 0.7%. Economic growth simply is not happening at the rate economists expect it to, which is weakening the euro significantly. There are no important events in the near future that could offer a boost to the euro.
On the other hand, the American dollar is doing quite well. It has been consistently supported by positive fundamental data and analysts are in the process of adjusting their expectations for an upcoming interest rate hike. Furthermore, there are currently negotiations being held between the US and China that may help avoid a tariff war, which is contributing to less stress on the financial markets and higher confidence in the USD.
In terms of the daily chart, today we have a pivot point for the pair located at 1.1768, though the pair is currently staying above it. We expect the EUR/USD to eventually decline, so look towards the nearby support levels at 1.1739 and 1.1688. If the pair starts gaining again, be aware of the resistances at 1.1819 and 1.1848. The indicators of technical analysis unanimously agree on a strong sell signal.
