EUR/USD Daily Forecast – Euro Attempts To Continue Its Rebound

EUR/USD Video 03.03.21.

Euro Tries To Gain More Upside Momentum

EUR/USD is currently trying to settle above the resistance at 1.2080 while the U.S. dollar is mostly flat against a broad basket of currencies.

The U.S. Dollar Index is trying to get to the test of the resistance level at 90.90. If the U.S. Dollar Index settles above this level, it will gain additional upside momentum and head towards the next resistance at 91.10 which will be bearish for EUR/USD.

Yesterday, EU reported that Euro Area Inflation Rate increased by 0.2% month-over-month in February compared to analyst forecast which called for growth of 0.3%. On a year-over-year basis, Inflation Rate grew by 0.9%. Core Inflation Rate increased by 1.1% year-over-year.

There are no signs of any pricing pressure in the Euro Area as the European economy remains under pressure from the pandemic. Europe’s manufacturing segment continues to recover but the services segment remains under pressure.

Today, foreign exchange market traders will take a look at Euro Area Services PMI report. Services PMI is projected to decline from 45.4 in January to 44.7 in February. Numbers below 50 show contraction.

Technical Analysis

EUR/USD is currently testing the nearest resistance level which is located at 1.2080. If this test is successful, EUR/USD will move towards the next resistance at the 50 EMA at 1.2105.

RSI is in the moderate territory after the recent downside move so there is plenty of room to gain additional upside momentum in case the right catalysts emerge.

A move above the 50 EMA will push EUR/USD towards the resistance at 1.2130. In case EUR/USD settles above this level, it will head towards the next resistance level at 1.2155.

On the support side, the nearest support for EUR/USD is located at 1.2060. A move below this level will push EUR/USD towards the support at 1.2040. If EUR/USD settles below this level, it will head towards the support at 1.2000. This support level has been tested during yesterday’s trading session and proved its strength so EUR/USD will likely need additional catalysts to settle below 1.2000.

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