EUR/USD Daily Forecast – Support At 1.1270 In Sight

Euro Moves Lower Against U.S. Dollar

EUR/USD is moving towards the support level at 1.1270 while U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index settled above the resistance at 96.25 and is trying to gain additional upside momentum. In case this attempt is successful, it will move towards the resistance at 96.50 which be bearish for EUR/USD.

Germany has recently reported that Retail Sales increased by 0.6% month-over-month in November compared to analyst consensus which called for a decline of 0.5%. On a year-over-year basis, Germany’s Retail Sales decreased by 0.2%. At this point, better-than-expected Retail Sales report from Germany failed to provide any support to the European currency.

Today, foreign exchange market traders will also focus on Germany’s Unemployment Rate report for December. Analysts expect that Germany’s Unemployment Rate remained unchanged at 5.3% in December.

Technical Analysis

EUR/USD declined below the support level at 1.1300 and is heading towards the next support level which is located at 1.1270. RSI remains in the moderate territory, so there is plenty of room to gain additional downside momentum in case the right catalysts emerge.

If EUR/USD manages to settle below the support at 1.1270, it will head towards the major support level at 1.1230. This support level has been tested several times in December 2021 and proved its strength. A move below this level will open the way to the test of the next support at 1.1200. In this scenario, EUR/USD will have a good chance to develop significant downside momentum.

On the upside, the previous support level at 1.1300 will serve as the first resistance level for EUR/USD. If EUR/USD manages to settle back above this level, it will head towards the resistance at the 20 EMA at 1.1320.

A move above the 20 EMA will lead to a test of the resistance at 1.1330. In case EUR/USD settles above this level, it will head towards the next resistance which is located at 1.1350.

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