EUR/USD Daily Forecast – Another Attempt To Settle Above 1.2220

EUR/USD Video 28.12.20.

Euro Starts The Week On A Strong Note

EUR/USD continues its attempts to settle above the nearest resistance level at 1.2220 while the U.S. dollar remains under pressure against a broad basket of currencies.

The U.S. Dollar Index is currently trying to get to the test of the nearest support level at 90. A move below this level will push the U.S. Dollar Index towards the next support at 80.75 which will be bullish for EUR/USD.

U.S. President Donald Trump signed the coronavirus aid and spending bill on Sunday. This decision may provide additional support to riskier assets and put more pressure on the American currency.

Today, foreign exchange market traders will have to focus on general market mood as there are no important economic reports to digest. In fact, the EU will not issue any notable economic reports until January 4, 2021, when traders will have a chance to take a look at the final reading of the Manufacturing PMI report for December.

At this point, it looks like the recent Brexit deal and the new U.S. stimulus package may serve as bullish catalysts for EUR/USD, but it remains to be seen whether the euro will be able to gain enough momentum at a time when some traders are still enjoying their holidays.

Technical Analysis

EUR/USD is currently testing the resistance at 1.2220. This resistance level has been tested many times and proved its strength.

In case EUR/USD manages to settle above the resistance at 1.2220, it will gain additional upside momentum and quickly get to the test of the next resistance level at 1.2250. A move above 1.2250 will push EUR/USD towards the next resistance which is located near the recent highs at 1.2280.

On the support side, the nearest support level for EUR/USD is located at 1.2175. A successful test of this level will open the way to the test of the next support at the 20 EMA at 1.2155. If EUR/USD declines below the 20 EMA, it will gain downside momentum and head towards the next support at 1.2110.

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