EUR/USD Daily Forecast – Test Of Resistance At 1.2155

EUR/USD Video 04.12.20.

Euro Gains Ground Against U.S. Dollar

EUR/USD is currently trying to settle above the resistance at 1.2155 while the U.S. dollar remains under significant pressure on the foreign exchange market.

The U.S. Dollar Index is testing the nearest support level at 90.60, and a move below this level will push it towards the 90 level which will be bullish for EUR/USD. Traders continue to sell the American currency on signs that U.S. lawmakers are getting closer to a compromise deal on a new stimulus package.

Also, it looks like better-than-expected economic reports from EU provided additional support to the euro. Yesterday, EU reported that Euro Area Services PMI decreased from 46.9 in October to 41.7 in November compared to analyst consensus of 41.3. Meanwhile, Euro Area Retail Sales grew by 1.5% month-over-month in October compared to analyst consensus which called for growth of 0.8%.

Today, EUR/USD traders will focus on the employment reports from the U.S. The Non Farm Payrolls report is expected to show that economy added 469,000 jobs in November while Unemployment Rate is projected to decline from 6.9% to 6.8%.

Technical Analysis

EUR/USD settled above the resistance level at 1.2090 and continues to test the next resistance at 1.2155. RSI is in the overbought territory so the risks of a pullback are increasing. However, it has not reached the extremely overbought territory so EUR/USD has a decent chance to continue its upside move.

The next resistance level for EUR/USD is located at 1.2220. There are no material levels between 1.2155 and 1.2220 so EUR/USD may quickly get to the test of the resistance at 1.2220 in case the right catalysts emerge. If EUR/USD settles above 1.2220, it will head towards the next resistance at 1.2250.

On the support side, the nearest support level for EUR/USD is located at the previous resistance level at 1.2090. If EUR/USD declines below 1.2090, it will move towards the next support level at 1.2000. The recent upside move was very fast and there are no strong levels between 1.2000 and 1.2155 so EUR/USD may easily move within this range.

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