EUR/USD Daily Forecast – Another Test Of Resistance At 1.1300

U.S. Dollar Is Losing Some Ground Against Euro

EUR/USD continues its attempts to get above the resistance level at 1.1300 while U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index has recently managed to get back below the support level at 96.25 and is trying to gain additional downside momentum. In case this attempt is successful, the U.S. Dollar Index will move towards the next support level at 96 which will be bullish for EUR/USD.

Yesterday, EU released the third estimate of the third-quarter Euro Area GDP Growth Rate report which indicated that Euro Area GDP increased by 2.2%, in line with the analyst consensus.

Euro Area ZEW Economic Sentiment Index increased from 25.9 in November to 26.8 in October while analysts expected that it would decline to 23.2. The surprising strength of the Euro Area ZEW Economic Sentiment Index provided some support to euro. It should be noted that foreign exchange market traders continue to expect that ECB will stay dovish in the upcoming months, which is bearish for euro. The European currency will have a chance to gain sustainable upside momentum when traders notice a shift in ECB rhetoric.

Technical Analysis

EUR/USD is currently trying to get above the nearest resistance level at 1.1300. In case this attempt is successful, EUR/USD will move towards the next resistance which is located at the 20 EMA near 1.1325.

A move above the 20 EMA will push EUR/USD towards the next resistance level at 1.1350. If EUR/USD climbs above the resistance at 1.1350, it will move towards the resistance at 1.1370.

On the support side, EUR/USD needs to settle below the support level at 1.1270 to have a chance to develop downside momentum in the near term. The next support level for EUR/USD is located at 1.1230. In case EUR/USD manages to settle below the support at 1.1230, it will head towards the support level at 1.1200.

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