EUR/USD Daily Forecast – Another Test Of Support At 1.1630

EUR/USD Video 04.11.20.

Euro Is Under Pressure Against U.S. Dollar

EUR/USD continues its attempts to settle below the key support level at 1.1630 as the U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index is currently testing the nearest resistance level at 94. If this test is successful, the U.S. Dollar Index will move towards the next resistance level at the recent highs at 94.30. Currently, the markets are pricing in an increased chance of a Trump win which looks favorable for the U.S. dollar.

Today, EU is expected to report that Euro Area Services PMI declined from 48 in September to 46.2 in October. In my opinion, there is a chance of a negative surprise given the latest developments on the coronavirus front in Europe. Meanwhile, the U.S. is projected to report that Services PMI increased from 54.6 in September to 56 in October.

The U.S. presidential election will remain the key driver for currency markets today. At this point, it looks like the current President Donald Trump and the Republicans in the Senate have better chances than previously expected.

This is a supportive catalyst for the U.S. dollar as a complete victory by Democrats would have led to a huge stimulus bill which would have required massive money-printing.

Technical Analysis

EUR/USD is currently trying to settle below the support at 1.1630. If this attempt is successful, EUR/USD will move towards the recent lows near 1.1600.

In case EUR/USD manages to settle below 1.1600, it will decline towards the next support level at 1.1580. A move below this level will open the way to the test of the next support at 1.1540.

On the upside, the nearest resistance level for EUR/USD is located at 1.1695. If EUR/USD manages to get above this level, it will gain additional upside momentum and head towards the resistance at the 20 EMA at 1.1730.

A move above the 20 EMA will push EUR/USD towards the next resistance level at the 50 EMA at 1.1745. If EUR/USD gets above the 50 EMA, it will get to the test of the recent highs at 1.1770.

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