Today we shall take a look at the EUR/USD currency pair. After last week’s tumble, now the pair has established a flat trading range around the 1.17 level.
The European single currency finds itself in a difficult position at the moment. On the one hand, there are many short-term pressures to keep the euro weak. For instance, the fact that the coronavirus pandemic is worsening in Europe again, which may entail new lockdowns, is threatening to slow down the economy once more. Plus, fundamentals have taken a blow recently, not that there is much data left to be published this week. Nevertheless, the markets are likely to adapt to these pressures in the long term, which is why the outlook for the euro is not so bearish as it is neutral. If the dollar falters, even for a little bit, the European currency will be right there to take advantage of it.
The US dollar is in fact also facing its fair share of pressures. Last week’s news that US President Donald Trump has contracted Covid-19, and his subsequent move from his White House quarantine to an actual hospital where he received oxygen and drugs reserved for the most critical cases has created a highly volatile atmosphere. The markets were bound to turn volatile even without Trump becoming sick due to the upcoming presidential elections, which are now less than a month away. There is so much chaos in the United States in terms of politics that the dollar is not able to benefit from the risk-off sentiment of investors, who instead prefer more traditional safe havens like the Japanese yen, at least for now. If the panic remains domestic, then the dollar can weaken, but if global pessimism sets in, then the USD could gain.
In terms of the daily chart, today we have a pivot point for the pair located at 1.1716, with the price currently trading above it. The daily support levels lie at 1.1712 and 1.1703. The daily resistances are located at 1.1724 and 1.1729, both of them overcome for now. The indicators of technical analysis are mixed but lean towards recommending a buy position today.
