EUR/USD Daily Forecast – Euro Attempts To Rebound From Yearly Lows

Euro Is Losing Some Ground Against U.S. Dollar

EUR/USD has recently made an attempt to settle below 1.1300 but failed to develop sufficient downside momentum and moved back above this level while the U.S. dollar pulled back against a broad basket of currencies.

The U.S. Dollar Index failed to settle above the resistance at 96.25 and declined below the 96 level. Currently, the U.S. Dollar Index is trying to settle below 95.90. In case this attempt is successful, the U.S. Dollar Index will move towards the support level at 95.75 which will be bullish for EUR/USD.

Today, foreign exchange market traders will focus on the inflation data from EU. Analysts expect that Euro Area Inflation Rate increased by 0.8% month-over-month in October. On a year-over-year basis, Euro Area Inflation Rate is projected to grow by 4.1%. Euro Area Core Inflation Rate is expected to increase by 2.1% year-over-year.

Recent inflation reports from various countries have mostly exceeded analyst expectations, and traders bet that central banks will be forced to raise rates sooner than previously expected. ECB is one of the most dovish central banks in the world, which is bearish for euro. In case Euro Area inflation reprots exceed analyst expectations, euro may get some support as higher numbers may change ECB position.

Technical Analysis

EUR/USD received support near 1.1270 and moved back above the 1.1300 level. In case EUR/USD manages to settle above this level, it will move towards the resistance which is located at 1.1325.

A successful test of the resistance at 1.1325 will open the way to the test of the resistance at 1.1350. If EUR/USD climbs back above this level, it will head towards the resistance at 1.1370. A move above this level will open the way to the test of the resistance at 1.1400.

On the support side, a move below 1.1300 will push EUR/USD back towards the recent lows near 1.1270. In case EUR/USD declines below this level, it will head towards the next support level which is located at 1.1230. A successful test of this level will open the way to the test of the next support at 1.1200.

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