THE EUR/USD CURRENCY PAIR
The EUR/USD currency pair is one of the pairs traded by clients in Capital way. Consequently, the pair represents the Euro and United States dollar exchange rate in the foreign exchange market. The EUR/USD currency pair is used to know the value of the Euro against the United States dollar thus, providing traders with details to how much of one euro is worth in dollars.
The currency pair is known as the most influential and most popular currency pair in the forex market since it represents the most powerful economies in the world. In addition to this, the dollar is the most traded currency in the forex market and it is seconded by the Euro.
FACTORS THAT AFFECT THE EUR/USD CURRENCY PAIR
- Political factors: one major factor that affects the EUR/USD currency pair is politics. Upcoming European Union and United States political events such as Brexit and Trumps Trade War affects the volatility of the pair, therefore, being the major cause of a rise and fall. Furthermore, these political factors crease a large volume of uncertainty among traders. Once traders and investors become uncertain of present and future trades, they trade less. This singular action results in a decrease in the trading volume of the pair.
- Economic indicators: major reports about the economy which has to do with the European or the united states Gross domestic product and Consumer price index have a great impact on the currency pair. These indicators and reports that proceeds from them can cause excitements in forex market hence, affecting the levels of investments and trades in addition to the EUR/USD rates.
- Central bank monetary policies: the decisions and shift in monetary policies set by influential bodies like the European Central Bank and Federal Reserve cause a huge fluctuation in the EUR/USD currency pair. A single policy can affect the value of both currencies in every way.
CAPITAL WAY EUR/UDS TECHNICAL ANALYSIS (May 20 to 24, 2019)
In relative to last week’s losses posted by the EUR/USD currency pair which erased the gains procured last two weeks, the resent highlights throw more light on services and manufacturing PMIs hence, the following outlook on upcoming events. As of April, the Eurozone consumer inflation indicators experience a massive impress with sharp gains. This led to an increase in final CPI to 1.7% when compared to 0.8% in March. With this, the final core CPI increased to 1.3% which was far above the initial estimation of 1.2%. This event marked the strongest gain since March 2013. Consequently, the eurozone has been in a spot of struggles in addition to the weak signs shown by the German locomotive. All the manufacturing sectors are drowning as a result of a global trade war. As it stands, the united states and China are in conversation to resolving the trade tensions however, president trump posed new tariffs on Chinese products which led to a counter-attack by China.
Since mid-October, 1.1570 line held in resistance.
The 1.1515 line became a high point at the end of January while 1.1435 was seen as the low point at the start of February.
The 1.1390 line became a stepping stone in late January and capped the EUR/USD currency pair earlier. This line was followed by the 1.1345.
1.1290 was the nest resistance line while the 1.1215 became the double-bottom in December 2018.
The 1.1215 line remained relevant which became the weak support line.
1.1119 which was mentioned last week became the next support level.
1.1025 was a cap back in the month of May 2017.
1.0950 line is the next support level.
The 1.0870 was a swing high in the month of December 2017.
The 1.0820 line is the final support line as at now.
NOW AND NEAR FUTURE EXPECTATIONS
This year so far, the EUR/USD currency pair has been experiencing a downturn as the Euro loses grounds due to trade tensions and decrease in value (1 Euro/dollar). Technical analysts hold that the currency pair will continue on a lower slide since the Euro is currently trading with an increased bearish momentum and cloud formation.