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

EUR/USD Video 09.12.20.

Euro Moves Higher Against U.S. Dollar

EUR/USD is moving towards the nearest resistance level at 1.2155 while the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index has recently made an attempt to gain upside momentum but faced strong resistance at the 91 level. Currently, the U.S. Dollar Index is located near 90.75. If the U.S. Dollar Index moves towards the nearest support at 90.50, EUR/USD will have a good chance to settle above 1.2155.

Yesterday, EU provided Euro Area Employment Change report for the third quarter which indicated that employment decreased by 2.3% compared to analyst consensus which called for a decline of 2%.

Meanwhile, ZEW Economic Sentiment Index has suddently increased from 32.8 in November to 54.4 in December compared to analyst forecast of 32. This was a surprising development at a time when the European economy continued to suffer from the second wave of the virus.

Tomorrow, foreign exchange market traders will focus on the European Central Bank Interest Rate Decision. The rate is expected to stay unchanged but traders will wait for ECB commentary. If ECB signals that it is not happy with the recent EUR/USD rally and is ready for more supportive measures, euro may find itself under pressure.

Technical Analysis

EUR/USD is trying to get to the test of the nearest resistance level at 1.2155. If EUR/USD manages to settle above this level, it will head towards the next resistance at the recent highs at 1.2175.

A move above the resistance at 1.2175 will push EUR/USD towards the next resistance level at 1.2220. There are no important levels between 1.2175 and 1.2220 so this move may be fast.

On the support side, the nearest support level for EUR/USD is located at 1.2090. If EUR/USD declines below this level, it will move towards the next support at the 20 EMA at 1.2010. A move below the 20 EMA will open the way to the test of the support at 1.1965.

From a big picture point of view, EUR/USD is stabilizing in a wide range between 1.2090 and 1.2175. If EUR/USD manages to stay above the support at 1.2090, it will have good chances to gain additional upside momentum.

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