EUR/USD Daily Forecast – Support At 1.1830 Stays Strong

EUR/USD Video 11.09.20.

Euro Tries To Continue Its Upside Move

EUR/USD is currently trying to stay above the nearest support at the 20 EMA at 1.1830 as the U.S. dollar remains mostly flat against a broad basket of currencies.

Yesterday, the European Central Bank made a decision to leave its interest rate unchanged. ECB promised to continue purchases under its pandemic emergency purchase programme (PEPP) and also stated that it would keep rates at current or lower levels until inflation gets closer to 2%.

However, ECB did not adopt an average inflation target of 2%. In addition, ECB commented that while it was looking at the exchange rate, there was no specific target for the euro. These comments sent the euro higher, and EUR/USD tested the resistance at 1.1910.

Euro Area inflation is currently in the negative territory, and there is plenty of work to do in order to bring it back to at least 1%. In this light, Euro Area interest rates may stay low for many years, just like the U.S. interest rates.

It remains to be seen whether traders will continue to bet on the rise of the euro in this situation. The leading world central banks are set to keep their interest rates at rock bottom for a long time so traders’ focus may ultimately shift to economic data.

Technical Analysis

EUR/USD is trying to gain more upside momentum above the 20 EMA at 1.1830. If this attempt is successful, EUR/USD will head towards the test of the next resistance level at 1.1910.

A move above the resistance at 1.1910 will open the way to the test of the next resistance at 1.1965. If EUR/USD gets above 1.1965, it will head towards September highs at 1.2000.

On the support side, the nearest support level for EUR/USD is located at the 20 EMA at 1.1830. If EUR/USD manages to settle below this level, it will head towards the next support at 1.1765. This support level has been tested several trading sessions ago and proved its strength.

A move below the support at 1.1765 will provide EUR/USD with a chance to test the next support at the 50 EMA at 1.1730.

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