Today we shall take a look at the EUR/USD currency pair. The pair dropped to its lowest level since the beginning of April last week but seems to have rebounded from that minimum. We saw some limited growth at the end of last week but it remains to be seen where the rate will head over the next couple of days.
The European single currency right now demonstrates a somewhat mixed outlook. Economic fundamentals from the eurozone have been positive and more growth and recovery are expected in the European Union. However, the European Central Bank still remains extremely committed to dovishness. Its latest meeting accounts revealed that the ECB is not thinking about tapering asset purchases at all and in fact plans to increase them in the second half of 2021 if needed. Nevertheless, some within the ECB have acknowledged that the situation is improving and that the bank should be able to step back if the economy is doing well. Thus, tapering this year cannot be ruled out yet, and the euro may strengthen if investors perceive that the time is right for a policy shift.
The American dollar is enjoying a better outlook. The nonfarm payrolls in June were better than expected, even if the jobless claims data from last week was disappointing and failed to meet the target levels. Right now the markets seem to believe in the recovery of the US labor market more than they fear the delta variant of the coronavirus, even as it starts to spread around the globe. Thus, the dollar is enjoying a boost from the better performance of the domestic economy, and also because it is a safe haven that seems desirable whenever there is news of a worsening in the coronavirus pandemic or a fear of a new wave of outbreaks caused by the new variant.
In terms of the daily chart, today we have a pivot point for the pair located at 1.1873, with the price currently trading below it. The daily support levels lie at 1.1863 and 1.1858, both of them overcome. The daily resistances are located at 1.1878 and 1.1883. The indicators of technical analysis strongly agree in recommending a sell position today.
