EUR/USD Daily Forecast – Another Test Of The Support At 1.2130

EUR/USD Video 15.01.21.

Euro Remains Under Pressure

EUR/USD continues its attempts to settle below the nearest support level at 1.2130 while the U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index managed to stay above the nearest support level at the 20 EMA at 90.20 and is moving towards the resistance at 90.50. A move above this level will push the U.S. Dollar Index towards the next resistance at 90.70 which will be bearish for EUR/USD.

Yesterday, U.S. President-elect Joe Biden proposed a new stimulus package which is worth $1.9 trillion and includes $1,400 stimulus checks. The foreign exchange market has mostly ignored the announcement as traders expected a stimulus package of this size.

Comments from the Fed Chair Jerome Powell drew more attention as he stated that the Fed was not ready to make any changes to its monthly bond purchases. U.S. Treasury yields pulled back after these comments, but declining yields did not hurt the U.S. dollar which continued its attempts to rebound against a broad basket of currencies.

Today, traders will have a chance to take a look at U.S. Retail Sales data for December which is expected to show that Retail Sales were unchanged on a month-over-month basis. Meanwhile, U.S. Industrial Production is projected to grow by 0.5% month-over-month while U.S. Manufacturing Production is also expected to increase by 0.5%.

Technical Analysis

EUR/USD is currently trying to settle below the nearest support level at 1.2130. If this attempt is successful, EUR/USD will get to the test of the 50 EMA level which is located at 1.2120.

A move below the 50 EMA will push EUR/USD towards the next support at 1.2080. If EUR/USD declines below this level, it will head towards the support level at 1.2060.

On the upside, the nearest resistance level for EUR/USD is located at 1.2155. If EUR/USD gets above this level, it will head towards the resistance at 1.2175. A successful test of the resistance at 1.2175 will open the way to the test of the next resistance level which is located at the 20 EMA at 1.2195.

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