EUR/USD Daily Forecast – Resistance At 1.1880 Is A Major Obstacle On The Way Up

EUR/USD Video 19.11.20.

U.S. Dollar Gains Ground Against Euro

EUR/USD failed to settle above the resistance at 1.1880 and pulled back while the U.S. dollar gained some ground against a broad basket of currencies.

The U.S. Dollar Index did not manage to get below the support at 92.10 and gained some upside momentum. Currently, it is trying to settle above the resistance at 92.50. If this attempt is successful, the U.S. Dollar Index will move towards the resistance at 92.80 which will be bearish for EUR/USD.

The American currency has been under pressure on the foreign exchange market for five trading sessions in a row, but it looks like the news about new restrictions in New York provided some support to the U.S. dollar as traders decreased their purchases of riskier currencies.

Yesterday, EU reported that Euro Area Inflation Rate increased by 0.2% month-over-month in October, in line with the analyst consensus. On a year-over-year basis, Inflation Rate decreased by 0.3%.

Euro Area Core Inflation Rate was 0.2% year-over-year. There are no signs of inflation in the Euro Area which is not surprising given the magnitude of the blow dealt by the coronavirus pandemic.

Technical Analysis

EUR/USD made several attempts to settle above the resistance level at 1.1880 but did not manage to gain sufficient upside momentum and declined closer to the nearest support level at 1.1830.

If EUR/USD settles below the support at 1.1830, it will move towards the next support level at 1.1800. The 20 EMA is located at 1.1815 so EUR/USD will likely get material support in the 1.1800 – 1.1830 area.

In case EUR/USD declines below the support at 1.1800, it will get to the test of the 50 EMA at 1.1785. A move below the 50 EMA will likely present a major problem for EUR/USD bulls as the previous move below the 50 EMA turned into a sell-off which pushed EUR/USD towards 1.1600.

On the upside, the nearest resistance for EUR/USD is located at 1.1880. If EUR/USD gets above this level, it will head towards the next resistance at 1.1910. A successful test of this level will open the way to the next resistance at 1.1965.

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