EUR/USD Daily Forecast – Support At 1.1750 Proved Its Strength

EUR/USD Video 07.10.20.

Euro Tries To Gain Upside Momentum After Sell-Off

EUR/USD found support near the key level at 1.1750 and tries to rebound after yesterday’s sell-off as the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index failed to settle above the 50 EMA at 93.85 and declined towards 93.70. The nearest support for the U.S. Dollar Index is located at the 20 EMA at 93.65.

If the U.S. Dollar Index moves below this support level, it will gain downside momentum and head towards the recent lows at 93.34. This scenario will be bullish for EUR/USD.

Yesterday, the U.S. dollar got a major boost after U.S. President Donald Trump decided to end stimulus talks with Democrats. It remains to be seen whether this rally will be sustainable as the U.S. economy clearly needs an additional aid package. The lack of stimulus may increase worries about the pace of the economic recovery in the U.S. and put pressure on the dollar.

There are no important economic reports scheduled to be published in the U.S. and EU today, so traders will wait for the release of FOMC Minutes from the recent meeting in search for clues about Fed’s policy.

Technical Analysis

EUR/USD failed to settle below the 50 EMA at 1.1740 and managed to get back above the key support level at 1.1750 after yesterday’s sell-off.

Currently, EUR/USD is trying to gain additional upside momentum. If this attempt is successful, EUR/USD will head towards the recent highs near 1.1800.

The nearest significant resistance level is still located at 1.1830. The recent trading action showed that there are no material levels between 1.1750 and 1.1800, so EUR/USD may quickly get to the test of the resistance at 1.1830 in case the right catalysts emerge. A successful test of this resistance level will open the way to the next resistance at 1.1910.

On the support side, EUR/USD will continue to get strong support in the 1.1740 – 1.1750 area. In case EUR/USD moves below the 50 EMA, it will gain downside momentum and head to the next support level at 1.1695. A move below this level will open the way to the test of the support at 1.1630.

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