EUR/USD Daily Forecast – Test Of Resistance At 1.2080

EUR/USD Video 09.02.21.

Euro Moves Higher Against U.S. Dollar

EUR/USD is currently trying to settle above the resistance at 1.2080 while the U.S. dollar is under pressure against a broad basket of currencies.

The U.S. Dollar Index is testing the nearest support level at the 20 EMA at 90.70. A move below this level will push the U.S. Dollar Index towards the next support at 90.50 which will be bullish for EUR/USD.

Today, Germany reported that Imports declined by 0.1% month-over-month in December compared to analyst consensus which called for a decline of 1.1%. Exports increased by 0.1% while analysts expected that they would drop by 1%.

This encouraging data from Europe’s leading economy may provide some additional support to euro which has recently found itself under pressure due to Europe’s problems on the mass vaccination front.

Foreign exchange market traders have favored riskier currencies in recent trading sessions as the number of new coronavirus cases in the world continued to decline. In addition, the market expects that U.S. will soon deliver a major coronavirus aid package which could provide additional support to riskier assets.

Technical Analysis

EUR/USD managed to get above the resistance at 1.2060 and is trying to settle above the next resistance level at 1.2080. If this attempt is successful, EUR/USD will get to the test of the next resistance at the 20 EMA at 1.2090.

A move above the 20 EMA will open the way to the test of the 50 EMA level at 1.2100. Most likely, EUR/USD will face significant resistance in the 1.2080 – 1.2100 area, and it may need additional catalysts to settle above the 50 EMA. If EUR/USD manages to get above 1.2100, it will head towards the next resistance level at 1.2130.

On the support side, the previous resistance at 1.2060 will serve as the first support level for EUR/USD. In case EUR/USD declines below this level, it will head towards the next support at 1.2040. A move below 1.2040 will push EUR/USD back to the support at 1.2000.

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