EUR/USD Daily Forecast – Euro Gains Ground Amid Brexit Optimism

EUR/USD Video 24.12.20.

U.S. Dollar Moves Lower Against Euro

EUR/USD is currently trying to settle above 1.2200 while the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index remains under pressure and is trying to settle below the nearest support level which has emerged at 90.15. It remains to be seen whether the U.S. Dollar Index will manage to gain enough momentum in holiday-thinned trading, although additional Brexit news may serve as a significant catalyst.

There are no important economic reports scheduled to be released in the U.S. and EU today so Brexit and U.S. stimulus will be the main topics for foreign exchange market traders. Recent reports suggested that EU and UK were very close to a compromise deal which could be announed today.

In the U.S., President Donald Trump vetoed a defense policy bill and reiterated his demands to raise the amount in stimulus checks from $600 to $2,000 per person. Interestingly, the recent developments on the stimulus front did not provide any material support to the U.S. dollar as traders favored riskier currencies.

Technical Analysis

EUR/USD continues its attempts to get above the nearest resistance level at 1.2220. Currently, EUR/USD is trying to settle above 1.2200. If this attempt is successful, EUR/USD will get to another test of the resistance at 1.2220.

RSI is in the moderate territory so there is plenty of room to gain upside momentum in case the right catalysts emerge. If EUR/USD manages to settle above the resistance at 1.2220, it will head towards the next resistance level at 1.2250. A successful test of this level will push EUR/USD towards the resistance which is located near December highs at 1.2280.

On the support side, the nearest support level for EUR/USD is still located at 1.2175. If EUR/USD declines below this level, it will head towards the support at 1.2155. The next support level is located at the 20 EMA at 1.2145 so EUR/USD will likely get strong support in the 1.2145 – 1.2155 area. A move below this support area will open the way to the test of the next support level at 1.2110.

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