EUR/USD Daily Forecast – Test Of Resistance At 1.1720

Euro Rebounds Against U.S. Dollar

EUR/USD is currently trying to settle above the resistance at 1.1720 while the U.S. dollar is under pressure against a broad basket of currencies.

The U.S. Dollar Index is currently testing the support level which is located at 93.40. If the U.S. Dollar Index manages to settle below this support level, it will head towards the next support at 93.10 which will be bullish for EUR/USD.

Today, EU will release flash Euro Area PMI reports for August. Euro Area Manufacturing PMI is projected to decline from 62.8 in July to 62 in August. Euro Area Services PMI is expected to remain unchanged at 59.8.

Traders will also have a chance to take a look at the flash reading of Euro Area Consumer Confidence report for August. Analysts expect that Consumer Confidence declined from -4.4 in July to -5 in August.

It should be noted that analyst estimates look optimistic despite worries about the impact of the new wave of coronavirus caused by the more contagious Delta variant. In case reports do not meet analyst expectations, the safe-haven U.S. dollar may get more support.

Technical Analysis

EUR/USD managed to settle above the resistance at 1.1690 and is testing the next resistance level at 1.1720. 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 settles above the resistance at 1.1720, it will head towards the next resistance level which is located near the 20 EMA at 1.1750. A move above the 20 EMA will open the way to the test of the resistance at 1.1775. If EUR/USD gets above this level, it will head towards the next resistance at 1.1800.

On the support side, the previous resistance level at 1.1690 will serve as the first support level for EUR/USD. If EUR/USD manages to settle back below this level, it will get to another test of the support near the yearly lows at 1.1660.

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