EUR/USD Daily Forecast – Support At 1.2155 Stays Strong

EUR/USD Video 23.12.20.

Euro Moves Higher Against U.S. Dollar

EUR/USD is trying to get back above 1.2200 while the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index managed to get below the support at 90.50 and is trying to develop additional downside momentum. The next material support level for the U.S. Dollar Index is located at 90. If the U.S. Dollar Index moves towards this level, EUR/USD will get additional support.

U.S. President Donald Trump stated that the new $900 billion coronavirus aid package was too small and should include stimulus checks of $2,000 per person instead of $600.

This was a major surprise for foreign exchange market traders who believed that Trump was ready to sign the new aid bill which was crafted after months of challenging negotiations between Republicans and Democrats. Interestingly, the news did not have a major impact on markets but the situation may change quickly.

In addition to the new twist in the U.S. stimulus story, traders will continue to follow Brexit news. At this point, it looks like EU and UK are close to a deal which will be bullish for EUR/USD.

Technical Analysis

EUR/USD made an attempt to settle below the support at 1.2155 but failed to gain downside momentum and rebounded closer to 1.2200. If EUR/USD manages to get above 1.2200, it will head towards the nearest resistance level at 1.2220.

A successful test of this level will push EUR/USD towards the next resistance at 1.2250. In case EUR/USD gets above the resistance at 1.2250, it will gain additional upside momentum and head towards the next resistance near the recent highs at 1.2280.

On the support side, the nearest support level for EUR/USD is located at 1.2175. A move below this level will push EUR/USD towards the support at 1.2155. This support level has been tested several times in recent trading sessions and proved its strength. If EUR/USD declines below 1.2155, it will head towards the next support level which is located at the 20 EMA at 1.2140.

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