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

EUR/USD Video 20.04.21.

Euro Moves Higher Against U.S. Dollar

EUR/USD is currently trying to settle above the resistance at 1.2060 while the U.S. dollar is under pressure against a broad basket of currencies.

The U.S. Dollar Index is testing the nearest support level which is located at 91. In case the U.S. Dollar Index manages to settle below this level, it will move towards the support at 90.70 which will be bullish for EUR/USD.

Today, Germany reported that Producer Prices increased by 0.9% month-over-month in March compared to analyst consensus which called for growth of 0.6%. On a year-over-year basis, Producer Prices increased by 3.7% compared to analyst consensus of 3.3%. The reports indicated that Producer Prices in Europe’s leading economy started to move higher which may provide more support to euro.

Foreign exchange market traders will also keep an eye on the developments in U.S. government bond markets. Treasury yields continue to rebound, and the yield of 10-year Treasuries is currently trying to settle above the 20 EMA at 1.625%. Interestingly, higher yields did not provide support to the U.S. dollar in recent trading sessions, but the situation may change quickly if the pace of the current upside move increases.

Technical Analysis

EUR/USD managed to settle above the resistance at 1.2040 and is trying to settle above the next resistance level at 1.2060. RSI is about to enter into the overbought territory, but there is enough room to gain additional upside momentum in case the right catalysts emerge.

In case EUR/USD settles above the resistance at 1.2060, it will move towards the next resistance level at 1.2090. A successful test of this level will push EUR/USD towards the resistance at 1.2115. If EUR/USD gets above this level, it will move towards the resistance at 1.2130.

On the support side, the previous resistance at 1.2040 will likely serve as the first support level for EUR/USD. If EUR/USD declines below this level, it will head towards the support at 1.2025. A successful test of this level will push EUR/USD towards the support at 1.1990.

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