EUR/USD Daily Forecast – Euro Retreats Against U.S. Dollar

Euro Is Losing Ground Against U.S. Dollar

EUR/USD  declined below the support level at 1.1300 and is moving towards the support at 1.1270 while U.S. dollar is moving higher against a broad basket of currencies.

The U.S. Dollar Index continues its attempts to settle above the resistance level at 96.25. In case the U.S. Dollar Index manages to settle above this level, it will move towards the next resistance level at 96.50 which will be bearish for EUR/USD.

Germany has recently reorted that Wholesale Prices increased by 1.3% month-over-month in November compared to analyst forecast which called for growth of 1.1%. On a year-over-year basis, Wholesale Prices grew by 16.6% compared to analyst forecast of 16.4%.

All recent economic reports highlighted rising inflation in the Euro Area, but it remains to be seen whether ECB is ready to change its course when it announces its Interest Rate Decision and provides commentary on Thursday. The Fed will release its Interest Rate Decision and commentary on Wednesday, and it looks that the potential divergence between policy of the main central banks will be the key driver for this week’s trading.

Technical Analysis

EUR/USD is currently trying to get to the test of the support level at 1.1270. This support level has been recently tested and proved its strength.

In case EUR/USD declines below the support at 1.1270, it will head towards the next support level which is located at 1.1230. A successful test of the support at 1.1230 will open the way to the test of the next support which is located at November lows at 1.1200.

On the upside, the nearest resistance level for EUR/USD is located at 1.1300. In case EUR/USD climbs back above this level, it will head towards the resistance at the 20 EMA at 1.1320.

A successful test of the resistance at the 20 EMA at 1.1320 will push EUR/USD towards the resistance level at 1.1350. In case EUR/USD gets above 1.1350, it will head towards the resistance at 1.1370.

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