EUR/USD Daily Forecast – Euro Remains Under Pressure Against U.S. Dollar

Euro Is Weak At The Start Of The Week

EUR/USD is currently trying to settle below the support at 1.1720 while the U.S. dollar is moving higher against a broad basket of currencies.

The U.S. Dollar Index gained strong upside momentum and is testing the resistance level at 93.40. In case this test is successful, the U.S. Dollar Index will move towards yearly highs near 93.75 which will be bearish for EUR/USD.

The economic calendar is empty today so foreign exchange market traders will focus on general market sentiment. Global markets are losing ground, and there are several reasons for this move.

First, markets are worried about the fate of China’s Evergrande, whose financial problems may have broader impact. Second, traders remain cautious ahead of the Fed Interest Rate Decision which will be released on September 22. It remains to be seen whether Fed is ready to announce the reduction of its asset purchase program, but markets look very nervous ahead of the important meeting.

Technical Analysis

EUR/USD settled below the support at 1.1750 and is trying to settle below the next support level at 1.1720. In case this attempt is successful, EUR/USD will move towards the support at 1.1690.

A successful test of the support at 1.1690 will open the way to the test of the next support level which is located near yearly lows at 1.1660. In case EUR/USD declines below this level, it will head towards the support at 1.1630. A move below this level will push EUR/USD towards the next support at 1.1615.

On the upside, EUR/USD needs to get back above 1.1720 to have a chance to develop upside momentum in the near term. The next resistance level for EUR/USD is located at 1.1750.

If EUR/USD gets above 1.1750, it will move towards the next resistance at 1.1775. A successful test of this level will open the way to the test of the resistance which is located at the 20 EMA at 1.1785.

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