EUR/USD Daily Forecast – Euro Moves Lower On Worries About Lockdowns In Europe

EUR/USD Video 28.10.20.

Euro Remains Under Pressure Against U.S. Dollar

EUR/USD declined below 1.1800 on worries about a potential lockdown in France while the U.S. dollar gained some ground against a broad basket of currencies.

The U.S. Dollar Index is currently trying to get to the test of the nearest resistance level at the 20 EMA at 93.25. In case the U.S. Dollar Index manages to settle above this level, it will gain additional upside momentum and head towards the next resistance at the 50 EMA at 93.55 which will be bearish for EUR/USD.

The euro found itself under pressure in recent trading sessions amid worries about a second wave of lockdowns in Europe. According to recent reports, France is heading for a new lockdown as the recently imposed curfew in major cities failed to contain the spread of the virus.

In addition, German Chancellor Angela Merkel is pushing for closure of restaurants, bars and gyms in order to deal with the recent surge in the number of new COVID-19 cases.

Tomorrow, European Central Bank will announce its interest rate decision. The rate is expected to stay unchanged but commentary from ECB may have a big impact on EUR/USD trading dynamics.

Technical Analysis

EUR/USD has managed to settle below 1.1800 and is trying to get to the test of the nearest support level at the 50 EMA at 1.1765. If EUR/USD settles below the 50 EMA, it will get to the test of the major support level at 1.1750.

In case EUR/USD settles below the support at 1.1750, it will gain additional downside momentum and head towards the next major support level at 1.1695, although it may also receive some support at 1.1720.

On the upside, the nearest resistance for EUR/USD is located at the 20 EMA at 1.1790. A move above this resistance level will open the way to the test of the next resistance at 1.1830.

If EUR/USD manages to get above the resistance at 1.1830, it will gain additional upside momentum and head towards the resistance near the recent highs at 1.1870.

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