EUR/USD Daily Forecast – Resistance At 1.2175 Stays Strong

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Published: May 10, 2021, 07:42 UTC

EUR/USD tested resistance at 1.2175 but did not manage to develop sufficient upside momentum and pulled back.

Euro Is Mostly Flat Against U.S. Dollar

EUR/USD has recently made an attempt to settle above the resistance at 1.2175 but failed to develop sufficient upside momentum and pulled back while the U.S. dollar was flat against a broad basket of currencies.

The U.S. Dollar Index settled below the support at 90.30 and is trying to move closer to the next support at the 90 level. If this attempt is successful, EUR/USD will get more support.

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

The U.S. dollar found itself under strong pressure on Friday after Non Farm Payrolls report indicated that the U.S. economy added just 266,000 jobs in April compared to analyst consensus of 978,000.

The Fed has previously indicated that it was focused on bringing the job market back to its normal state so disappointing employment reports signal that the Fed will have to stay very dovish.

Interestingly, bond markets have shrugged off the initial shock, and the yields of 10-year Treasuries returned to 1.60% after a brief dip below 1.50%. If Treasury yields gain upside momentum, the U.S. dollar may get more support.

Technical Analysis

EUR/USD did not manage to settle above the resistance at 1.2175 and moved closer to the nearest support level at 1.2155. In case EUR/USD declines below this level, it will move towards the next support at 1.2130.

A successful test of the support at 1.2130 will push EUR/USD towards the support at 1.2115. A move below this level will open the way to the test of the support at 1.2090.

On the upside, EUR/USD needs to settle above the resistance at 1.2175 to continue its upside move. If EUR/USD gets above this level, it will head towards the resistance at 1.2220.

No important levels were formed between 1.2175 and 1.2220 so this move may be fast. In case EUR/USD settles above 1.2220, it will head towards the resistance at 1.2250.

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

About the Author

Vladimir Zernovauthor

Vladimir is an independent trader and analyst with over 10 years of experience in the financial markets. He is a specialist in stocks, futures, Forex, indices, and commodities areas using long-term positional trading and swing trading.