EUR/USD Daily Forecast – Key Support At 1.2175 Stays Strong

EUR/USD Video 24.05.21.

U.S. Dollar Is Losing Ground Against Euro

EUR/USD is currently trying to get back above 1.2200 while the U.S. dollar is under pressure against a broad basket of currencies.

The U.S. Dollar Index is slowly moving towards the support level at 89.75. If the U.S. Dollar Index manages to get to the test of this level, EUR/USD will get more support.

There are no important economic reports scheduled to be released in U.S. and EU today so foreign exchange market traders will focus on general market sentiment and the developments in U.S. government bond markets.

The trading action in U.S. government bond markets has recently calmed down despite fears about higher inflation. It looks that Fed officials managed to convince traders that inflation remained under control. However, the situation may change quickly if inflation reports show that prices are rising fast.

Technical Analysis

EUR/USD failed to settle below the support at 1.2175 and rebounded towards 1.2200. EUR/USD made several attempts to settle below the support at 1.2175 in recent trading sessions but did not manage to develop downside momentum. At this point, it is a key support level for EUR/USD.

In case EUR/USD declines below 1.2175, it will gain downside momentum and get to the test of the support at 1.2155. A successful test of this level will open the way to the test of the next support which is located at the 20 EMA at 1.2140. If EUR/USD moves below the 20 EMA, it will head towards the support at 1.2130.

On the upside, the nearest resistance level for EUR/USD is located at 1.2220. If EUR/USD manages to settle above this level, it will move towards the resistance which is located near the recent highs at 1.2250.

A successful test of the resistance at 1.2250 will push EUR/USD towards the next resistance level at 1.2280. In case EUR/USD gets above this level, it will move towards the resistance at 1.2310.

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