Today we shall take a look at the EUR/USD currency pair. Over the last week, the price of this pair has slowly climbed upward, though it paused before the strong resistance at 1.10 and was unable to overcome it.
The outlook for the European single currency has slightly improved compared to last week. The reason for this is the European Central Bank’s decision last week to keep interest rates at their current (already low) levels and to also simplify lending to other banks, which would help the eurozone during the crisis. Furthermore, European leaders are meeting again this week to decide on further joint action to alleviate the damage caused by the coronavirus pandemic. They previously failed twice to arrive at an agreement, but perhaps third time’s the charm. Still, expectations are so low that even if they don’t negotiate an agreement, the euro will likely not be shaken much.
Meanwhile, the situation of the US dollar has evolved somewhat. Previously, the USD was under the influence of opposing factors. Whenever bad data came in and recession fears heightened, the USD gained in value as a safety asset. Likewise, when the markets showed more optimism, the dollar decreased in value. Now the USD is behaving differently depending on the monetary policy behind each currency it is compared to. In the case of the euro, where further rate cuts are not expected, the dollar is weakening, thus allowing the euro to reclaim some of its lost positions.
In terms of the daily chart, today we have a pivot point for the pair located at 1.0965, with the price currently trading below it. The daily support levels lie at 1.0950 and 1.0937. The daily resistances are located at 1.0977 and 1.0993. The indicators of technical analysis are somewhat mixed but ultimately recommend a buy position today.
