EUR/USD Daily Forecast – Support At 1.1560 In Sight

Euro Moves Towards Yearly Lows

EUR/USD is currently moving towards the support at 1.1560 while the U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index is testing the resistance level at 94.20. If this test is successful, the U.S. Dollar Index will move towards yearly highs at 94.50 which will be bearish for EUR/USD.

Today, foreign exchange market traders will have a chance to take a look at Euro Area Retail Sales data for August. Analysts expect that Euro Area Retail Sales increased by 0.8% month-over-month. On a year-over-year basis, Euro Area Retail Sales are projected to grow by 0.4%.

In the U.S., traders will focus on ADP Employment Change report which is projected to show that private businesses hired 428,000 workers in September.

Both reports may have a material impact on currency dynamics so traders should be prepared to volatility. There is no shortage of catalysts today, so euro may test yearly lows and gain additional downside momentum as ECB remains dovish while the Fed will likely reduce its asset purchase program in November if employment reports show that the job market continues to recover.

Technical Analysis

EUR/USD managed to get below the support at 1.1580 and is moving towards the next support level which is located near the recent lows at 1.1560. In case EUR/USD declines below this level, it will head towards the next support at 1.1540.

A successful test of the support at 1.1540 will open the way to the test of the next support level at 1.1510. If EUR/USD manages to settle below 1.1510, it will move towards the next support at 1.1470.

On the upside, EUR/USD needs to get back above 1.1580 to have a chance to develop upside momentum in the near term. The next resistance level for EUR/USD is located at 1.1610. In case EUR/USD gets back above this resistance level, it will head towards the next resistance which is located at 1.1630.

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