EUR/USD Daily Forecast – Another Test Of Resistance At 1.2250
EUR/USD Video 29.12.20.
Euro Moves Higher Against U.S. Dollar
EUR/USD is trying to settle above the resistance at 1.2250 while the U.S. dollar is losing ground 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. If the U.S. Dollar Index settles below the 90 level, it will move towards the next support at the yearly lows at 89.75 which will be bullish for EUR/USD.
In absence of economic news, foreign exchange market traders focus on the latest developments on the U.S. stimulus front.
The U.S. House of Representatives approved higher stimulus checks that were demanded by U.S. President Donald Trump, although it remains to be seen whether the measure will be approved by the Senate.
At this point, it looks like traders are ready to bet on additional stimulus which may serve as bearish catalyst for the American currency.
EUR/USD managed to get above the resistance at 1.2220 and is trying to settle above the next resistance level at 1.2250. RSI is getting closer to the overbought territory but there is still plenty of room to gain additional momentum in case the right catalysts emerge.
The resistance level at 1.2250 has been tested many times in December and remained a major obstacle on the way up for EUR/USD. If EUR/USD manages to settle above the resistance at 1.2250, it will move towards the next resistance level which is located near December highs at 1.2280.
This time, EUR/USD will have better chances to get above the resistance at 1.2280. In case EUR/USD settles above the resistance at 1.2280, it will head towards the next resistance at 1.2325 although it may also face some resistance at 1.2300.
EUR/USD has not visited this territory for several years so it remains to be seen whether previous levels will be relevant for today’s trading.
On the support side, the previous resistance at 1.2220 will likely serve as the first support level for EUR/USD. A move below this level will push EUR/USD towards the support at 1.2175. The next support level is located at the 20 EMA at 1.2165 so EUR/USD will likely get strong support in the 1.2165 – 1.2175 area.
For a look at all of today’s economic events, check out our economic calendar.