EUR/USD Daily Forecast – Euro Tries To Move Away From Yearly Lows

Euro Moves Higher Against U.S. Dollar

EUR/USD is currently trying to settle back above 1.1560 while the U.S. dollar is under some pressure against a broad basket of currencies.

The U.S. Dollar Index managed to get below the support at 94.20 and is moving towards the next support level at 94. In case the U.S. Dollar Index manages to get to the test of the 94 level, EUR/USD will get more support.

Yesterday, EU reported that Euro Area Retail Sales increased by 0.3% month-over-month in August compared to analyst consensus which called for growth of 0.8%. On a year-over-year basis, Euro Area Retail Sales were flat. The report put additional pressure on euro as it indicated that consumer activity was not recovering, which means that ECB will leave current stimulus measures in place for many months to come.

Foreign exchange market traders will also continue to monitor the developments in U.S. job market. On Wednesday, ADP Employment Change report indicated that private businesses added 568,000 jobs in September. Today, U.S. will release Initial Jobless Claims and Continuing Jobless Claims reports. Initial Jobless Claims are projected to decline from 362,000 to 348,000 while Continuing Jobless Claims are expected to decrease from 2.8 million to 2.78 million.

Technical Analysis

EUR/USD failed to settle below the support at 1.1540 and is trying to settle above the resistance level at 1.1560. In case this attempt is successful, EUR/USD will move towards the next resistance at 1.1580.

A move above 1.1580 will push EUR/USD towards the resistance at 1.1610. If EUR/USD manages to settle above this level, it will head towards the next resistance level at 1.1630.

On the support side, EUR/USD needs to get back below 1.1560 to continue its downside move. The next support level is located at 1.1540.

In case EUR/USD declines below 1.1540, it will move towards the support level at 1.1510. A successful test of this level will open the way to the test of the support at 1.1470.

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