EUR/USD Daily Forecast – New Highs In Sight

EUR/USD Video 18.08.20.

Euro Tries To Get To New Highs

EUR/USD has managed to get above the resistance level at 1.1880 and heads towards the recent highs near 1.1910 amid continued weakness of the American currency.

The U.S. Dollar Index, which measures the strength of the U.S. dollar against a broad basket of currencies, has settled close to recent lows at 92.50.

This is a very important moment for the U.S. dollar. In case the U.S. Dollar Index manages to settle below the support at 92.50, it will likely gain significant downside momentum.

In this scenario, EUR/USD will get above the resistance at 1.1910 and head towards 1.2000.

There are no material economic reports scheduled to be published in the EU today, but tomorrow traders will have a chance to evaluate Euro Area inflation numbers for July.

Euro Area Inflation Rate is projected to decline by 0.3% on a month-over-month basis. On a year-over-year basis, Inflation Rate is expected to show growth of 0.4%.

Core Inflation Rate is expected to be stronger than Inflation Rate, growing by 1.2% on a year-over-year basis.

Traders will pay close attention to inflation numbers in the Euro Area. A stronger-than-expected inflation will signal that current measures to support the economy are working and may provide an additional boost to EUR/USD.

Technical Analysis

EUR/USD is currently trying to settle above the nearest resistance level at 1.1880. In case this attempt is successful, EUR/USD will head towards the next resistance level near the recent highs at 1.1910.

RSI is still in the moderate territory and there is plenty of room to gain more momentum. A move above the resistance at 1.1910 will signal that EUR/USD is ready to gain more ground. In this case, EUR/USD will head towards 1.2000.

On the support side, the nearest significant support level for EUR/USD is located at 1.1800. A move towards this level will signal that EUR/USD has lost some upside momentum but would not present a major problem for EUR/USD bulls.

The real problem for EUR/USD bulls will occur in case EUR/USD declines below the 20 EMA at 1.1770 as this move will signal that the current upside momentum has come to an end.

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