EUR/USD Daily Forecast – Euro Is Mostly Flat Against U.S. Dollar
EUR/USD Video 08.01.21.
Support At 1.2250 Stays Strong
EUR/USD is trying to settle below the nearest support level at 1.2250 while the U.S. dollar remains mostly flat against a broad basket of currencies.
The U.S. Dollar Index managed to settle above the resistance at 89.75 and is trying to get above the next resistance level at 90. If the U.S. Dollar Index settles above the 90 level, it will move towards the 20 EMA at 90.15 which will be bearish for EUR/USD.
Yesterday, EU reported that Euro Area Retail Sales declined by 6.1% month-over-month in November compared to analyst consensus which called for a decline of 3.4%. On a year-over-year basis, Retail Sales decreased by 2.9%. The second wave of the virus put significant pressure on Retail Sales in Europe, and it remains to be seen whether the situation improved in December.
Not surprisingly, weak consumer activity put pressure on prices, and Euro Area Inflation Rate was -0.3% on a year-over-year basis in December.
Today, foreign exchange market traders will have a chance to take a look at unemployment data from U.S. and EU. Analysts expect that Euro Area Unemployment Rate increased from 8.4% in October to 8.5% in November.
EUR/USD made an attempt to settle below the support at 1.2250 but failed to develop sufficient downside momentum. In case EUR/USD manages to settle below this level, it will head towards the next support which is located at the 20 EMA at 1.2225.
A successful test of the support at 1.2225 will open the way to the test of the next support level at 1.2175.
On the upside, the nearest resistance level for EUR/USD is located at 1.2280. In case EUR/USD settles above this level, it will head towards the resistance at 1.2310.
If EUR/USD gets above 1.2310, it will head towards the resistance at 1.2325. A move above this level will push EUR/USD towards the recent highs at 1.2350.
For a look at all of today’s economic events, check out our economic calendar.