EUR/USD Daily Forecast – Euro Declines Against U.S. Dollar

U.S. Dollar Tries To Gain Some Ground Against Euro

EUR/USD is currently testing the support level at 1.1800 while the U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index has recently made an attempt to settle above the resistance at the 20 EMA at 92.80 but failed to develop sufficient upside momentum and pulled back. In case the U.S. Dollar Index moves above the 20 EMA, it will head towards the next resistance at 93.10 which will be bearish for EUR/USD.

Yesterday, EU reported that Euro Area Inflation Rate increased by 3% year-over-year in August compared to analyst consensus of 2.7%. Euro Area Core Inflation Rate grew by 1.6% year-over-year.

Today, foreign exchange market traders will take a look at the final reading of Euro Area Manufacturing PMI report for August which is expected to show that Manufacturing PMI declined from 62.8 in July to 61.5 in August. Euro Area Unemployment Rate is expected to decline from 7.7% in June to 7.6% in July.

In the U.S., traders will focus on ADP Employment Change report which is projected to show that private businesses added 613,000 jobs in August. The final reading of U.S. Manufacturing PMI report is projected to show that Manufacturing PMi declined from 63.4 in July to 61.2 in August.

All in all, it will be a busy day so traders should be prepared for volatility.

Technical Analysis

EUR/USD failed to settle above the 50 EMA at 1.1810 and is trying to get below the support level at 1.1800. In case this attempt is successful, EUR/USD will head towards the support at the 20 EMA at 1.1775.

A successful test of the support at the 20 EMA at 1.1775 will push EUR/USD towards the support at 1.1750. If EUR/USD declines below this level, it will move towards the next support at 1.1720.

On the upside, a move above the 50 EMA will open the way to another test of the resistance at 1.1830. If EUR/USD gets above this level, it will move towards the resistance at 1.1860. A move above the resistance at 1.1860 will push EUR/USD towards the next resistance level at 1.1880.

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