EUR/USD Daily Forecast – Support At 1.2175 Stays Strong

EUR/USD Video 20.05.21.

Euro Rebounds After Yesterday’s Sell-Off

EUR/USD did not manage to settle below the support at 1.2175 and is moving towards 1.2200 while the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index failed to get to the test of the resistance at 90.30 and is moving towards the support at the 90 level. In case the U.S. Dollar Index gets back below the 90 level, it wil head towards the support at 89.75 which will be bullish for EUR/USD.

Germany has recently released Producer Prices report which indicated that Producer Prices increased by 0.8% month-over-month in April, in line with the analyst consensus. On a year-over-year basis, Producer Prices increased by 5.2% compared to analyst consensus of 5.1%.

Today, foreign exchange market traders will also have a chance to take a look at Initial Jobless Claims and Continuing Jobless Claims reports from the U.S. The reports are projected to show that the situation in the U.S. job market continues to improve.

Tomorrow, the focus will shift to flash PMI data for May from EU and U.S. Euro Area Manufacturing PMI is expected to decline from 62.9 in April to 62.5 in May while Euro Area Services PMI is projected to increase from 50.5 to 52.3.

In the U.S., Manufacturing PMI is projected to decrease from 60.5 to 60.2 while Services PMI is expected to decline from 64.7 to 64.5.

Technical Analysis

EUR/USD failed to settle below the support at 1.2175 and is slowly moving towards the nearest resistance level at 1.2220.

In case EUR/USD manages to settle above 1.2220, it will move towards the next resistance which is located at the recent highs at 1.2250. A successful test of this level will open the way to the test of the next resistance at 1.2280.

On the support side, EUR/USD needs to settle below the support at 1.2175 to continue its pullback. The next support level for EUR/USD is located at 1.2155. If EUR/USD declines below this level, it will head towards the support at 1.2130. A move below 1.2130 will push EUR/USD towards the support which is located at the 20 EMA at 1.2115.

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