EUR/USD Daily Forecast – Another Test Of Support At 1.2175 Yields No Results

EUR/USD Video 27.05.21.

Euro Gains Ground Against U.S. Dollar

EUR/USD received support at 1.2175 and moved towards 1.2200 while the U.S. dollar remained flat against a broad basket of currencies.

The U.S. Dollar Index is currently trying to settle above the resistance at the 90 level. If the U.S. Dollar Index manages to stay above this level, it will head towards the resistance at 90.30 which will be bearish for EUR/USD.

Today, Germany released GfK Consumer Confidence report for June which indicated that Consumer Confidence improved from -8.6 (revised from -8.8) to -7. Germany’s Consumer Confidence remains under pressure and stays far below pre-pandemic levels.

Foreign exchange market traders will also take a look at various economic reports from the U.S. Initial Jobless Claims are projected to decline from 444,000 to 425,000 while Continuing Jobless Claims are expected to decrease from 3.75 million to 3.68 million.

Analysts expect that Pending Home Sales increased by 0.8% month-over-month in April while Durable Goods Orders grew by 0.7%. The second estimate of the first-quarter GDP Growth Rate report is projected to show that GDP grew by 6.5%.

The market will likely focus on the employment data, although any surprises on the GDP front may also have a material impact on currency dynamics.

Technical Analysis

EUR/USD failed to settle below the support at 1.2175 and rebounded towards 1.2200. The nearest resistance level for EUR/USD is located at 1.2220. In case EUR/USD manages to settle above this level, it will head towards the next resistance level which is located at 1.2250.

A successful test of the resistance at 1.2250 will open the way to the test of the next resistance at 1.2280.

On the support side, EUR/USD needs to settle below the support at 1.2175 to have a chance to develop downside momentum. The next support level is located at the 20 EMA at 1.2160.

If EUR/USD settles below the 20 EMA at 1.2160, it will head towards the support at 1.2130. A successful test of this support level will push EUR/USD towards the next support level which is located at 1.2115.

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