EUR/USD Daily Forecast – Euro Attempts To Gain Ground Against U.S. Dollar

Euro Moves Higher Against U.S. Dollar

EUR/USD is currently trying to settle back above 1.1270 while U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index has recently moved back below 96.50 and is trying to develop additional downside momentum. In case this attempt is successful, it will move towards the support level at 96.25 which will be bullish for EUR/USD.

Today, foreign exchange market traders will focus on the economic data from U.S. Analysts expect that Retail Sales increased by 0.8% month-over-month in November after growing by 1.7% in October. On a year-over-year basis, Retail Sales are projected to grow by 15.9%.

While the Retail Sales report may have a material impact on currency dynamics, the key event of the day is the Fed Interest Rate Decision. The Fed is expected to announce that it will cut its asset purchase program fast.

Most likely, such announcement has been already priced in by markets. In this situation, the markets will be sensitive to comments about the pace of rate hikes in 2022. If the Fed signals that it is open to the possibility of three rate hikes next year, the U.S. dollar may get significant support.

Technical Analysis

EUR/USD it trying to get back above 1.1270. In case this attempt is successful, EUR/USD will move towards the next resistance level at 1.1300.

A move above 1.1300 will lead to the test of the next resistance which is located at the 20 EMA at 1.1310. In case EUR/USD moves above 1.1310, it will head towards the resistance at 1.1330. A successful test of this level will open the way to the test of the resistance at 1.1350.

On the support side, EUR/USD needs to settle below 1.1270 to have a chance to develop downside momentum in the near term. The next support level for EUR/USD is located at 1.1230.

In case EUR/USD manages to settle below 1.1230, it will move towards the support at 1.1200. A move below this level will push EUR/USD towards the support at 1.1170.

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