EUR/USD Daily Forecast – Euro Moves Higher Ahead Of ECB Interest Rate Decision

EUR/USD Video 22.04.21.

Euro Is Gaining Ground Against U.S. Dollar

EUR/USD is currently trying to settle above the resistance at 1.2040 while the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index is currently testing the support at the 91 level. In case the U.S. Dollar Index manages to settle below this level, it will move towards the next support at 90.70 which will provide more support to EUR/USD.

Today, foreign exchange market traders will focus on ECB Interest Rate Decision. ECB is expected to leave the rate unchanged, and the market will focus on the Bank’s commentary about the pace of asset purchases and inflation outlook.

Yesterday, Bank of Canada provided significant support to Canadian dollar when it decided to decrease its asset purchase program, but such strong moves are not expected from ECB at this point.

At the same time, traders should still expect volatile trading in EUR/USD today as the market may react strongly to any changes in ECB commentary.

Technical Analysis

EUR/USD failed to settle below the support at 1.2025 and is testing the resistance at 1.2040. In case EUR/USD manages to settle above 1.2040, it will move towards the next resistance at 1.2060.

RSI is still in the moderate territory, and there is plenty of room to gain additional upside momentum in case the right catalysts emerge. It should be noted that 20 EMA has just crossed the 50 EMA to the upside, suggesting the continuation of the upside trend.

If EUR/USD settles above 1.2060, it will head towards the next resistance level at 1.2090. A successful test of this level will push EUR/USD towards the next resistance which is located at March highs at 1.2115.

On the support side, the nearest support level for EUR/USD is located at 1.2025. In case EUR/USD declines below this level, it will move towards the next support at 1.1990. A move below 1.1990 will open the way to the test of the support at 1.1965.

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