EUR/USD Daily Forecast – Support At 1.1630 In SightEUR/USD gained strong downside momentum and is heading towards the nearest support level at 1.1630.
EUR/USD Video 24.09.20.
Euro Continues To Lose Ground As Euro Area Services Segment Slips Back Into Contraction
EUR/USD is heading towards the nearest support level at 1.1630 as the U.S. dollar continues to gain ground against a broad basket of currencies.
The U.S. Dollar Index has settled close to 94.50 and looks ready to test the significant resistance level at 94.65. If this test is successful, the U.S. Dollar Index will gain more upside momentum which will be bearish for EUR/USD.
Yesterday, traders had a chance to take a look at flash readings of Euro Area PMI reports. Manufacturing PMI increased from 51.7 in August to 53.7 in September while Services PMI declined from 50.5 to 47.6. Numbers below 50 show contraction so the recovery of the services segment has come to an end.
The market is worried that the economic situation in the eurozone will get worse due to the problems on the coronavirus front. All major European countries are discussing additional restrictions to stop the surge in the number of new cases.
For now, nationwide lockdowns are ruled out but the situation is developing quickly and disappointing virus data may put additional pressure on EUR/USD.
EUR/USD gained strong downside momentum and continues to lose ground amid fears about the second wave of coronavirus in Europe.
The nearest support level for EUR/USD is located at 1.1630. If EUR/USD manages to settle below this level, it will head towards the next support level at 1.1600.
A move below the support at 1.1600 will open the way to the test of the next support level at 1.1540. I’d note that there are no major levels between 1.1500 and 1.1700 so the downside move may be fast if the right catalysts emerge.
On the upside, the first resistance level for EUR/USD is located at 1.1695. If EUR/USD manages to settle above this level, it will gain more upside momentum and head towards the next resistance level at the 50 EMA at 1.1750. A move above the 50 EMA will signal that EUR/USD failed to establish a downside trend.
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