EUR/USD Daily Forecast – Euro Moves To Multi-Week Highs

EUR/USD Video 18.05.21.

U.S. Dollar Remains Under Pressure Against Euro

EUR/USD is currently moving towards the resistance level at 1.2220 while the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index has recently managed to get below the psychologically important support level at 90. The next support level for the U.S. Dollar Index is located at 89.75. If the U.S. Dollar Index gets to the test of this level, EUR/USD will get more support.

Today, foreign exchange market traders will have a chance to take a look at the second estimate of the first-quarter Euro Area GDP Growth Rate. Analysts expect that Euro Area GDP declined by 0.6% quarter-over-quarter due to the negative impact of the pandemic.

It remains to be seen whether this report will have a material impact on the market or traders will prefer to wait for Euro Area inflation data which will be published on Wednesday. Inflation became a hot topic for markets after the recent inflation reports from the U.S. signaled that prices were rising faster than expected. There were no signs of serious pricing pressure in the Euro Area but the situation may change quickly after European countries gradually lift virus containment measures.

Technical Analysis

EUR/USD managed to get above the resistance at 1.2175 and is trying to gain additional upside momentum. The next resistance level for EUR/USD is located at 1.2220.

If EUR/USD manages to settle above 1.2220, it will head towards the resistance at 1.2250. A successful test of this level will open the way to the test of the next resistance at 1.2280.

On the support side, the previous resistance at 1.2175 will likely serve as the first support level for EUR/USD. A move below this level will push EUR/USD towards the support at 1.2155. In case EUR/USD declines below the support at 1.2155, it will head towards the next support level at 1.2130.

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