EUR/USD Daily Forecast – Resistance At 1.2250 Remains Strong

EUR/USD Video 26.05.21.

Euro Pulls Back Against U.S. Dollar

EUR/USD failed to settle above the resistance at 1.2250 and pulled back while the U.S. dollar gained some ground against a broad basket of currencies.

The U.S. Dollar Index is currently trying to settle above the resistance at 89.75. In case this attempt is successful, the U.S. Dollar Index will move towards the next resistance level at 90 which will be bearish for EUR/USD.

Yesterday, Germany reported that Business Confidence improved from 96.6 (revised from 96.8) in April to 99.2 in May as the economy continued to recover from the blow dealt by the coronavirus pandemic.

There are no important economic reports scheduled to be released in the U.S. and EU today so foreign exchange market traders will likely focus on the latest developments in U.S. government bond markets.

Treasury yields have recently moved lower as traders believed that inflation remained under control. If the current downside trend continues, the U.S. dollar will find itself under more pressure.

Technical Analysis

EUR/USD did not manage to settle above 1.2250 and is moving towards the support at 1.2220. In case EUR/USD manages to settle below the support at 1.2220, it will head towards the next support level which is located at 1.2175. RSI is in the moderate territory, and there is plenty of room to gain downside momentum in case the right catalysts emerge.

A successful test of this level will push EUR/USD towards the support at the 20 EMA at 1.2160. If EUR/USD settles below the 20 EMA, it will move towards the support at 1.2130.

On the upside, EUR/USD needs to settle above the resistance at 1.2250 to continue its upside move. The next resistance level is located at 1.2280.

If EUR/USD manages to settle above the resistance at 1.2280, it will head towards the next resistance at 1.2310. A successful test of the resistance at 1.2310 will open the way to the test of the resistance which is located at yearly highs at 1.2350.

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