EUR/USD Daily Forecast – Resistance At 1.1965 In Sight

EUR/USD Video 31.08.20.

Euro Tries To Gain More Upside Momentum

EUR/USD is making an attempt to settle above 1.1900 as the U.S. Dollar Index is trying to develop more downside momentum below 92.50.

The U.S. Dollar Index, which measures the strength of the U.S. dollar against a broad basket of currencies, has settled below 92.50 and tested the nearest support at 92.10 after the Fed indicated that it was ready to let inflation increase above 2%.

Traders prepare themselves for years of low interest rates in the U.S., which puts pressure on the American currency.

In addition, the U.S. Republicans and Democrats have once again failed to reach consensus on the new coronavirus aid package deal. U.S. House Speaker Nancy Pelosi stated that Democrats were ready to negotiate a $2.2 trillion deal while U.S. President Donald Trump was prepared to sign a $1.3 trillion bill.

The two sides remain far apart and there is a significant chance that no progress will be made before U.S. presidential election in November. The U.S. economy needs another stimulus package to maintain its current upside momentum so failure to negotiate the next round of stimulus is a negative catalyst for the U.S. dollar.

Technical Analysis

 

EUR/USD is currently trying to settle above 1.1900. In case this attempt is successful, EUR/USD will head towards the nearest resistance level which is located at the recent highs at 1.1965.

RSI is in the moderate territory so there is plenty of room to develop more upside momentum in case the right catalysts emerge.

If EUR/USD manages to settle above the resistance at 1.1965, it will be able to continue the current upside move and test the next resistance level at 1.2000. A move above the resistance at 1.2000 will likely attract new bulls and lead to increased upside momentum.

On the support side, the nearest support level for EUR/USD is located at the 20 EMA at 1.1830. This is an important level for EUR/USD since a move below the 20 EMA will signal that the current upside momentum has come to an end. In this case, EUR/USD will head towards the next support level at the recent lows at 1.1765.

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