EUR/USD Daily Forecast – Resistance At 1.2090 In Sight

EUR/USD Video 02.12.20.

Euro Developed Strong Upside Momentum

EUR/USD managed to get above the psychologically important resistance level at 1.2000 and gained strong upside momentum while the U.S. dollar continued to lose ground against a broad basket of currencies.

The American currency remains under significant pressure on the foreign exchange market while traders evaluate the latest news about U.S. stimulus negotiations.

House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin talked about a potential stimulus package for the first time since the presidential election.

Additional stimulus will put more pressure on the U.S. dollar. Currently, the U.S. Dollar Index is trying to settle below the nearest support level which has emerged at 91.15. If this attempt is successful, the U.S. Dollar Index will move towards the 91 level which will be bullish for EUR/USD.

Yesterday, EU reported that Euro Area Manufacturing PMI decreased from 54.8 in October to 53.8 in November compared to analyst consensus of 53.6. Euro Area Inflation Rate declined by 0.3% year-over-year compared to analyst forecast which called for a decline of 0.2%. Core Inflation Rate increased by 0.2% year-over-year, in line with analyst consensus. Prices remain weak in the Euro Area as the pandemic continues to put serious pressure on the EU economy.

Today, EUR/USD traders will focus on the latest unemployment data from the EU. Analysts expect that Euro Area Unemployment Rate increased from 8.3% in September to 8.4% in October.

Technical Analysis

EUR/USD has finally managed to get above the resistance at 1.2000 and immediately developed strong upside momentum. EUR/USD has not visited this area since 2018, and it remains to be seen whether previous levels will be in play in today’s trading.

The nearest resistance level for EUR/USD is located at 1.2090. If EUR/USD manages to settle above this level, it will head towards the next resistance at 1.2155.

On the support side, the previous resistance at 1.2000 will serve as the first support level for EUR/USD. If EUR/USD declines below this level, it will head towards the next support at 1.1965. A move below 1.1965 will open the way to the test of the support at 1.1910.

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