EUR/USD Daily Forecast – Test Of Resistance At 1.1965

EUR/USD Video 30.11.20.

Euro Gained Strong Upside Momentum

EUR/USD managed to settle above the major resistance level at 1.1910 and is testing the next resistance at 1.1965 while the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index is currently trying to settle below the yearly lows at 91.75. If this attempt is successful, the U.S. Dollar Index will gain additional downside momentum and head towards the next material support level at 91 which will be bullish for EUR/USD.

The American currency is under serious pressure on the foreign exchange market because traders expect another U.S. stimulus package in early 2021. They also believe that the U.S. Fed will soon provide additional support to the economy. The main risk for dollar bears is that the trade becomes overcrowded which will increase the probability of getting squeezed on the way down.

Interestingly, EUR/USD managed to gain upside momentum despite the disappointing economic data for the Euro Area which was published on Friday. Consumer Confidence declined from -15.5 in October to -17.6 in November. Meanwhile, Industrial Sentiment declined from -9.2 to -10.1 while Services Sentiment decreased from -12.1 to -17.3.

Technical Analysis

EUR/USD gained strong upside momentum and is trying to settle above the resistance at 1.1965. RSI is located in the moderate territory so there is plenty of room to gain additional momentum in case the right catalysts emerge.

If EUR/USD manages to settle above the resistance at 1.1965, it will move towards the psychologically important resistance level at 1.2000. EUR/USD made an attempt to settle above this level back in September but faced strong resistance and quickly declined below 1.1900.

This time, the potential test of the resistance at 1.2000 will likely have more chances to succeed as EUR/USD spent plenty of time near 1.1900, suggesting that there is established demand for EUR/USD near current levels.

On the support side, the previous resistance level at 1.1910 will likely serve as the first support level for EUR/USD. If EUR/USD moves below this level, it will head towards the next support level at 1.1880.

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