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EUR/USD Daily Forecast – Euro Pulls Back From Recent Highs

By:
Vladimir Zernov
Published: Sep 2, 2020, 07:29 UTC

EUR/USD pulled back to 1.1900 after an unsuccessful test of the resistance at 1.2000.

EUR/USD

In this article:

EUR/USD Video 02.09.20.

The New U.S. Coronavirus Aid Package Comes Back Into Spotlight

EUR/USD is trying to settle below 1.1900 as it continues to pull back amid strengthening U.S. dollar.

Yesterday, the U.S. dollar enjoyed a major rebound after the release of strong U.S. Manufacturing PMI data. In addition, White House Chief of Staff Mark Meadows stated that Senate Republicans were ready to take up their coronavirus aid bill with $500 billion of additional aid.

In turn, U.S. House Speaker Nancy Pelosi stated that Democrats and Republicans still had serious differences. While it remains to be seen whether the two sides will manage to reach a consensus, the return of the stimulus topic into the news flow provided additional support to the U.S. dollar.

Today, traders will focus on U.S. ADP Employment Change report which is expected to show that private employment increased by 950,000. A strong report could boost the American currency while a disappointing report may stop the current rebound.

While the recent pullback of EUR/USD was fast, EUR/USD still remains in an upside trend. The U.S. dollar will likely need additional strong catalysts to continue its rebound as traders believe that years of low interest rates in the U.S. will put long-term pressure on the American currency.

Technical Analysis

eur usd september 2 2020

EUR/USD managed to get below the support level at 1.1910 and tries to continue its pullback.

The nearest support level for EUR/USD is located at the 20 EMA at 1.1850. A move below the 20 EMA will signal that the current upside momentum has come to an end so I’d expect a lot of interest at the 20 EMA level in case EUR/USD tests this level in the upcoming trading sessions.

If EUR/USD settles below the 20 EMA, it will gain additional downside momentum and head towards the next support level at the recent lows at 1.1765.

On the upside, the previous support at 1.1910 will likely serve as the first resistance level for EUR/USD. In case EUR/USD manages to get above this level, it will head towards the next resistance at 1.1965. A move above 1.1965 will open the way to the test of the psychologically important resistance level at 1.2000.

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

About the Author

Vladimir is an independent trader and analyst with over 10 years of experience in the financial markets. He is a specialist in stocks, futures, Forex, indices, and commodities areas using long-term positional trading and swing trading.

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