EUR/USD Daily Forecast – Euro Remains Under Serious Pressure

EUR/USD Video 23.09.20.

U.S. Dollar Gets Support From Chicago Fed President’s Hawkish Comments

EUR/USD is currently trying to settle below 1.1700 as fears about the second wave of coronavirus in Europe continue to put pressure on the euro.

In addition, the U.S. dollar is supported by surprisingly hawkish comments from Chicago Fed President Charles Evans who stated that the Fed could start raising rates before average inflation gets to 2%.

The U.S. Dollar Index, which measures the strength of the U.S. dollar against a broad basket of currencies, got an additional boost from these comments and is currently trying to settle above the 94 level.

It remains to be seen whether the market will start to price in the possibility of higher interest rates in the U.S. The pandemic is still a major problem, and there’ll likely be no opportunity to increase rates in the next two years.

Today, traders will have a chance to evaluate flash PMI numbers from Euro Area and U.S. Euro Area Manufacturing PMI is expected to increase from 51.7 in August to 51.9 in September while Euro Area Services PMI is projected to stay flat at 50.5.

In the U.S., Manufacturing PMI is forecasted to remain flat at 53.1 while Services PMI is expected to decline from 55 to 54.7.

Technical Analysis

EUR/USD managed to get below the nearest support level at 1.1695 and tries to develop additional downside momentum.

The next support level for EUR/USD is located at 1.1630. If EUR/USD moves below this support level, it will head towards the next support at 1.1600.

On the upside, the previous support at 1.1715 will likely serve as the first resistance level for EUR/USD. A move above this level will open the way to the test of the next resistance at the 50 EMA at 1.1755.

At this point, EUR/USD looks ready to establish a new downside trend. To do this, EUR/USD must settle below the August low at 1.1695. There are no serious levels between 1.1500 and 1.1700 so the downside move may be fast in case the right catalysts emerge.

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