EUR/USD Daily Forecast – Euro Makes Another Run at the 20 DMAEUR/USD is seeing some buying pressure in early European trading on Tuesday and is making another attempt at the 20-day moving average after ranging for the past two sessions.
EUR/USD Boosted by German Data Beat
After a string of weak data over the past few weeks, industrial production figures out of Germany came in ahead of expectations.
Production in industry rose 0.3% on a month over month basis in August to beat out the analyst estimate for a decline of 0.2%. Further, there was an upward revision for July to show a decline of 0.4% versus the originally reported drop of 0.6%.
Producer price index figures from the US will be released later in the day and stand to trigger some volatility in the pair.
EUR/USD has been trading in a range between roughly 1.0965 and 1.1000 for the past two sessions. There is quite a bit of overhead resistance in play at this stage, although the pair has not shown any signs of turning lower from here as of yet.
For the past few sessions, I have been looking for a potential turn lower in EUR/USD as the pair faces a major confluence of resistance.
On a daily chart, the upside hurdle consists of the 20-day moving average as well as the psychological 1.1000 handle. Slightly above this resistance area, a further barrier comes from the upper bound of a declining trend channel that has contained price action since late June.
However, the pair continues to post successions of higher highs and higher lows to reaffirm the near-term uptrend. The pair printed a fresh two-week high yesterday albeit it was a marginal high and it was not sustained.
At this stage, a drop below range support at 1.0964 would be encouraging for bears. While above the level, We may see the pair push higher to test the mentioned trend channel resistance.
The daily close will be important relative to the 20-day moving average if the pair continues to rally from current levels.
- EUR/USD continues to trade within a range.
- The pair has been trending higher and has not shown any signs of reversing as of yet, although there is major upside resistance in play.