EUR/USD Daily Forecast – Support At 1.1630 Remains Strong

EUR/USD Video 03.11.20.

Euro Tries To Rebound Against U.S. Dollar

EUR/USD did not manage to settle below the key support level at 1.1630 and is trying to gain upside momentum as the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index declined below the support at the 94 level and is pulling back after the recent upside move. The nearest support for the U.S. Dollar Index is located at the 50 EMA at 93.60. If the U.S. Dollar Index manages to get to the test of this support level, EUR/USD will have a good chance to develop upside momentum.

Yesterday, EU reported that Euro Area Manufacturing PMI increased from 53.7 in September to 54.8 in October compared to analyst consensus of 54.4. On Wednesday, traders will have a chance to evaluate the Euro Area Services PMI report which is expected to show that Services PMI declined from 48 in September to 46.2 in October.

The U.S. presidential election on Tuesday is the main event for EUR/USD traders but market participants will also pay attention the latest coronavirus numbers from Europe. Currently, the situation looks grim, and it remains to be seen whether a month of serious restrictions in Europe will be sufficient enough to deal with coronavirus surge.

Technical Analysis

EUR/USD failed to settle below the support at 1.1630 and is moving towards the nearest resistance level at 1.1695. If EUR/USD manages to settle above the resistance at 1.1695, it will gain additional upside momentum and head towards the next resistance at 1.1720.

A move above the resistance at 1.1720 will open the way to the test of the 20 EMA near 1.1735. The 50 EMA is located at 1.1745 so EUR/USD is set to face strong resistance in the 1.1720 – 1.1750 area.

On the support side, EUR/USD needs to settle below the key support level at 1.1630 to continue its downside move. If EUR/USD declines below this level, it will head towards the next support level at 1.1580. A move below the support at 1.1580 will push EUR/USD towards the next support level at 1.1540.

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