Today we shall take a look at the EUR/USD currency pair. It appears that the euro is still carefully extending its lead. The trend has been bullish for two weeks now, with only the smallest of downward corrections.
The European single currency is at a crossroads right now. This week there is a crucial European Council meeting, where both the coronavirus pandemic and Brexit will be discussed. Considering the spread of Covid-19 in Europe since the arrival of the autumn, any hints that the EU is considering more fiscal stimulus will be beneficial for the euro. On the other hand, if European leaders signal that they are ready for a deal with the United Kingdom, the euro will weaken. Thus, traders need to be careful and take into account all of the outcomes this week. In addition, there will be inflation reports published in the days leading up to the summit, but those are likely not going to have such a great impact on euro pairs as the summit will.
The US dollar is also in a difficult to read position, which is why its overall outlook is neutral at present. On the one hand, the fact that the White House and the House of Representatives are still negotiating a stimulus bill, paired with the increasing likelihood of Joe Biden winning the elections, is weakening the dollar. A Biden presidency is seen as more likely to implement more fiscal stimulus to support the US economy through the ongoing crisis, which is working against the USD. However, if there is no stimulus, and if fundamentals from the United States are disappointing this week, the USD can strengthen as a safe haven.
In terms of the daily chart, today we have a pivot point for the pair located at 1.1814, with the price currently trading below it. The daily support levels lie at 1.1804 and 1.1794. The daily resistances are located at 1.1825 and 1.1834. The indicators of technical analysis agree in strongly recommending a buy position today.
