EUR/USD Daily Forecast – Test Of Resistance At 1.1610

Euro Gains Ground Against U.S. Dollar

EUR/USD is currently trying to settle back above the resistance at 1.1610 while the U.S. dollar is under pressure against a broad basket of currencies.

The U.S. Dollar Index has recently managed to get close to the nearest support level at the 20 EMA at 93.80. If the U.S. Dollar Index moves below this level, it will head towards the support at 93.50 which will be bullish for EUR/USD.

Germany has recently reported that Consumer Confidence improved from 0.4 (revised from 0.3) to 0.9 compared to analyst consensus of -0.5. The stronger-than-expected Consumer Confidence report from Europe’s leading economy provided support to euro.

Yesterday, U.S. reported that Consumer Confidence increased from 109.8 in September (revised from 109.3) to 113.8 in October while analysts expected that it would decline to 108.3.

It looks that consumer mood is improving ahead of the holiday season, which is good for economic growth and can boost demand for riskier assets.

Technical Analysis

EUR/USD failed to settle below the support level at 1.1580 and rebounded towards the resistance level at 1.1610. RSI is in the moderate territory, and there is plenty of room to gain additional upside momentum in case the right catalysts emerge.

In case EUR/USD moves back above the resistance at 1.1610, it will get to the test fo the next resistance level which is located at the 20 EMA at 1.1620. A successful test of the resistance at the 20 EMA will push EUR/USD towards the next resistance at 1.1630. If EUR/USD settles above the resistance at 1.1630, it will continue its rebound and head towards the next resistance level at 1.1660.

On the support side, the nearest support level for EUR/USD is located at 1.1580. In case EUR/USD manages to settle below the support at 1.1580, it will gain additional downside momentum and head towards the next support at 1.1560. A move below 1.1560 will open the way to the test of the support at 1.1540.

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