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

EUR/USD Video 08.04.21.

Euro Moves Higher Against U.S. Dollar

EUR/USD continues its attempts to settle above the resistance at 1.1880 while the U.S. dollar is under pressure against a broad basket of currencies.

The U.S. Dollar Index is currently trying to settle below the support at the 20 EMA at 92.35. This support level has been tested several times in recent trading sessions and proved its strength. If the U.S. Dollar Index manages to settle below this level, it will move towards the support at 92.15 which will be bullish for EUR/USD.

Yesterday, EU reported that Euro Area Services PMI increased from 45.7 in February to 49.6 in March compared to analyst consensus of 48.8. A stronger-than-expected Services PMI report provided additional support to euro.

Today, EU reported that Euro Area Construction PMI increased from 45 in February to 50.1 in March compared to analyst consensus of 52. Numbers above 50 show expansion.

Foreign exchange market traders will continue to monitor the developments in the U.S. government bond debt market. Currently, Treasury yields are moving lower which is bearish for the American currency. If this pullback continues, EUR/USD may get additional support.

Technical Analysis

EUR/USD continues to test the nearest resistance level which is located at 1.1880. Yesterday, EUR/USD made an attempt to settle above this level but failed to develop sufficient upside momentum.

In case EUR/USD settles above 1.1880, it will get to the test of the resistance at 1.1900. A move above the resistance at 1.1900 will push EUR/USD towards the next resistance at the 50 EMA at 1.1920. In case EUR/USD settles above this level, it will head towards the resistance at 1.1965.

On the support side, the nearest support level for EUR/USD is located at 1.1850. The 20 EMA is in the nearby, so EUR/USD may get significant support near this level.

If EUR/USD declines below the support at 1.1850, it will head towards the next support level at 1.1830. A move below this level will push EUR/USD towards the support at 1.1800.

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