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

Euro Attempts To Gain Some Ground Against U.S. Dollar

EUR/USD is currently trying to settle back above 1.1690 while the U.S. dollar is flat against a broad basket of currencies.

The U.S. Dollar Index is trying to get to the test of the nearest resistance level at 93.65. A move above this level will push the U.S. Dollar Index towards the next resistance at 93.90 which will be bearish for EUR/USD.

Germany has recently released Producer Prices report for July. The report indicated that Producer Prices increased by 1.9% month-over-month compared to analyst consensus which called for growth of 0.8%. On a year-over-year basis, Producer Prices grew by 10.4% compared to analyst consensus of 9.2%.

Foreign exchange market traders will also monitor the developments in U.S. government bond markets. The yield of 10-year Treasuries managed to get below 1.25% and continues to move lower.

At this point, it looks that lower yields do not put pressure on the American currency which is supported by increased demand for safe-haven assets. In this light, continuation of the bullish trend in U.S. government bond markets, which pushes Treasury yields lower, may be even bullish for U.S. dollar.

Technical Analysis

EUR/USD did not manage to settle below the support level at 1.1660 and is trying to rebound. Currently, EUR/USD is testing the nearest resistance level which is located at 1.1690.

In case this test is successful, EUR/USD will move towards the next resistance level at 1.1720. A move above 1.1720 will open the way to the test of the resistance at 1.1750. If EUR/USD manages to get above the resisatnce at 1.1750, it will get to the test of the next resistance level which is located at the 20 EMA at 1.1760.

On the support side, the nearest support level for EUR/USD is located at 1.1660. A successful test of this level will push EUR/USD towards the next support at 1.1625. In case EUR/USD declines below 1.1625, it will move towards the support at 1.1600.

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