EUR/USD Daily Forecast – Support At 1.2090 In Sight

EUR/USD Video 07.12.20.

U.S. Dollar Is Gaining Some Ground Against Euro At The Start Of The Week

EUR/USD is under some pressure at the beginning of the week while the U.S. dollar is trying to move higher against a broad basket of currencies.

The U.S. Dollar Index received material support near 90.50 and is slowly moving towards the 91 level. If the U.S Dollar Index gets to the test of the 91 level, EUR/USD may find itself under pressure.

Today, the focus of foreign exchange market traders will be split between Brexit news and U.S. stimulus negotiations. It remains to be seen whether any progress will be achieved in the challenging negotiations between EU and UK.

Time is running out for negotiators to reach a compromise deal. A no-deal Brexit will likely send shockwaves across markets, but traders remain optimistic about the outcome of current negotiations. That said, EUR/USD and GBP/USD may find themselves under some pressure in case Monday brings no positive news on the Brexit front.

In the the U.S., lawmakers will likely try to craft a deal around the $908 billion proposal prepared by members of both parties. However, it is not clear whether any consensus will be reached before Biden takes office on January 20.

Technical Analysis

EUR/USD failed to settle above the resistance at 1.2155 and is moving towards the nearest support level at 1.2090. There are no important levels between 1.2090 and 1.2155 so EUR/USD may move fast within this range.

In case EUR/USD declines below the support at 1.2090, it will gain downside momentum and head towards the next support level at 1.2000.

On the upside, the nearest resistance for EUR/USD is located at 1.2155. RSI has pulled back from recent highs so there is some room to gain upside momentum in case the right catalysts emerge.

If EUR/USD manages to settle above the resistance at 1.2155, it will move towards the next resistance level which has emerged near 1.2175. A successful test of this level will push EUR/USD towards the next resistance at 1.2220.

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