EUR/USD Daily Forecast – Support At The 20 EMA Stays Strong

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Published: May 3, 2021, 07:43 UTC

EUR/USD failed to settle below the support at the 20 EMA and is testing the resistance at 1.2040.

Euro Tries To Rebound Against U.S. Dollar

EUR/USD has recently made an attempt to settle below the support at the 20 EMA at 1.2020 while the U.S. dollar found itself under pressure against a broad basket of currencies.

The U.S. Dollar Index tested the resistance at the 20 EMA at 91.35 but failed to develop sufficient upside momentum and pulled back. The nearest support level for the U.S. Dollar Index is located at 91. If the U.S. Dollar Index gets to the test of this level, EUR/USD will get more support.

On Friday, EU reported that Euro Area Inflation Rate increased by 1.6% year-over-year in April, in line with the analyst consensus. Euro Area Core Inflation Rate increased by 0.8%. Inflation reports indicated that inflation remained fully under control in the Euro Area.

Unemployment Rate report was a bit better than expected as Unemployment Rate decreased from 8.2% in February (revised from 8.3%) to 8.1% in March compared to analyst consensus of 8.3%.

Today, foreign exchange market traders will have a chance to take a look at the final reading of Euro Area Manufacturing PMI report for April. Analysts expect that Manufacturing PMI increased from 62.5 in March to 63.3 in April.

Technical Analysis

EUR/USD did not manage to settle below the support at the 20 EMA at 1.2020 and is testing the resistance at 1.2040. In case this test is successful, it will head towards the next resistance level which is located at 1.2060.

If EUR/USD gets above the resistance at 1.2060, it will move towards the next resistance at 1.2090. A move above this level will open the way to the test of the resistance at 1.2115.

On the support side, EUR/USD needs to settle below the 20 EMA at 1.2020 to continue its pullback. The next support level is located at 1.1990. If EUR/USD gets below this level, it will head towards the next support at 1.1965. A move below this level will push EUR/USD towards the support at 1.1925.

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

About the Author

Vladimir Zernovauthor

Vladimir is an independent trader and analyst with over 10 years of experience in the financial markets. He is a specialist in stocks, futures, Forex, indices, and commodities areas using long-term positional trading and swing trading.