EUR/USD Daily Forecast – Euro Slipped To Yearly Low

U.S. Dollar Gains More Ground Against Euro

EUR/USD managed to get below the support at 1.1690 and is trying to get to the test of the next support level at 1.1660 while the U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index is currently testing the resistance level at 93.40. In case the U.S. Dollar Index manages to settle above 93.40, it will head towards the next resistance at 93.65 which will be bearish for EUR/USD.

Yesterday, EU reported that Euro Area Inflation Rate increased by 2.2% year-over-year in July while Euro Area Core Inflation Rate grew by 0.7%. Both reports were in line with the analyst consensus and indicated that there were no signs of rising inflation in the Euro Area.

Meanwhile, foreign exchange market traders had a chance to take a look at FOMC Minutes which provided strong support to the American currency. The Fed looks ready to cut its asset purchase program in 2021, and traders have already started to position themselves for the inevitable tapering.

Today, traders will focus on job market data from U.S. Initial Jobless Claims are projected to decline from 375,000 to 363,000 while Continuing Jobless Claims are expected to decrease from 2.87 million to 2.8 million.

Technical Analysis

EUR/USD settled below the support at 1.1690 and is heading towards the next support level which is located at 1.1660. RSI is close to the oversold territory, but there is enough room to develop additional downside momentum in case the right catalysts emerge.

In case EUR/USD manages to settle below the support at 1.1660, it will head towards the next support level at 1.1625. A move below this level will open the way to the test of the support at 1.1600.

On the upside, the previous support at 1.1690 will serve as the first resistance level for EUR/USD. A successful test of this level will push EUR/USD towards the resistance at 1.1720. If EUR/USD gets above 1.1720, it will move towards the next resistance at 1.1750.

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