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EUR/USD Daily Forecast – Euro Gains Ground Ahead Of Inflation Reports

Vladimir Zernov
·2-min read

Euro Moves Higher Against U.S. Dollar

EUR/USD is trying to get above the resistance level at 1.1325 while the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index is currently testing the support level at 96. In case this test is successful, it will move towards the support level at 95.75 which will be bullish for EUR/USD.

Yesterday, EU reported that Euro Area Consumer Confidence declined from -4.8 in October to -6.8 in November, in line with the analyst consensus. Euro Area Industrial Sentiment decreased from 14.2 in October to 14.1 in November compared to analyst consensus of 13.9.

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Interestingly, Euro Area Services Sentiment improved from 18 (revised from 18.2) in October to 18.4 in November while analysts expected that it would decline to 16.6. The strength of the Euro Area Services Sentiment is surprising given the recent developments on the coronavirus front.

Today, foreign exchange market traders will focus on inflation data from EU. Analysts expect that Euro Area Inflation Rate increased by 0.1% month-over-month in November. On a year-over-year basis, Euro Area Inflation Rate is projected to grow by 4.5%. Euro Area Core Inflation Rate is expected to increase by 2.3% year-over-year.

Technical Analysis

EUR/USD is testing the resistance level at 1.1325. In case this test is successful, EUR/USD will move towards the next resistance level which is located at the 20 EMA at 1.1350.

A move above the resistance at the 20 EMA will open the way to the test of the resistance at 1.1370. If EUR/USD manages to settle above 1.1370, it will head towards the next resistance level at 1.1400.

On the support side, the nearest support level for EUR/USD is located at 1.1300. In case EUR/USD declines below the support at 1.1300, it will head towards the next support level which is located at 1.1270.

A successful test of the support at 1.1270 will push EUR/USD towards the support at 1.1230. If EUR/USD settles below 1.1230, it will move towards the next support level at 1.1200.

For a look at all of today’s economic events, check out our economic calendar.

This article was originally posted on FX Empire

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