EUR/USD Daily Forecast – Euro Failed To Move Higher At The Start Of The Week

EUR/USD Video 22.02.21.

Resistance At 1.2130 Remains A True Wall On The Way Up

EUR/USD has recently made another attempt to settle above the resistance at 1.2130 but failed to develop sufficient upside momentum while the U.S. dollar gained some ground against a broad basket of currencies.

The U.S. Dollar Index failed to move below the nearest support level at 90.30 and is currently trying to get to the test of the nearest resistance level which is located at 90.50. If the U.S. Dollar Index gets above this level, it will head towards the resistance at the 20 EMA at 90.60 which will be bearish for EUR/USD.

On Friday, EU reported that Euro Area Manufacturing PMI increased from 54.8 in January to 57.7 in February compared to analyst consensus of 54.3. Meanwhile, Euro Area Services PMI declined from 45.4 to 44.7 compared to analyst consensus of 45.9 as the services segment remained under significant pressure.

Today, foreign exchange market traders will focus on the Business Confidence data from Germany. Analysts expect that Business Confidence increased from 90.1 in January to 90.5 in February. A stronger-than-expected report may provide additional support to the euro, while a disappointing report will likely trigger a sell-off as the market is concerned about the speed of the economic recovery in Europe.

Technical Analysis

EUR/USD did not manage to settle above the resistance at 1.2130 and is testing the nearest support level which is located at the 50 EMA at 1.2105. If EUR/USD declines below this level, it will head towards the next support at 1.2080.

A successful test of the support at 1.2080 will push EUR/USD towards the support level at 1.2060. In case EUR/USD declines below the support at 1.2060, it will head towards the next support level which is located at 1.2040.

On the upside, EUR/USD needs to get above the resistance at 1.2130 to have a chance to develop upside momentum in the near term. If EUR/USD settles above 1.2130, it will move towards the next resistance at 1.2155. A move above this level will open the way to the test of the resistance at 1.2175.

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