EUR/USD approaches 1.0600

Source: Dukascopy Bank SA


In the aftermath of the US elections, the EUR/USD declined due to a broad strengthening of the US Dollar.

It was expected by our analysts that the USD would decline, as the Trump government would not care about inflation and stimulate the markets. However, it appears that the strengthening and potential gains in the USA are creating demand for the USD, as investment is coming in from the rest of the world. This demand outweighs upcoming stimulus.

This week, the rate was heading to the 1.0600 mark, but could first find support in the weekly S1 simple pivot point at 1.0621. Further below, the 1.0550 level and the weekly S2 at 1.0525 might act as support, before the 1.0500 mark would be reached.

Meanwhile, note that a potential recovery of the Euro against the USD is expected to face resistance in the 1.0700 mark and the descending 50 and 100-hour simple moving averages. Higher above, take into account the weekly simple pivot point at 1.0779 and the range near 1.0760.
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