EUR/USD Daily Forecast – Test Of Resistance At 1.2175

EUR/USD Video 16.12.20.

Euro Tests The Key Resistance Level

EUR/USD is trying to settle above the resistance at 1.2175 while the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index managed to get below the key support level at 90.50 and is trying to develop additional downside momentum. If this attempt is successful, the U.S. Dollar Index will move towards the 90 level which will provide support to EUR/USD.

Today, foreign exchange market traders will focus on Fed’s commentary after the announcement of Fed Interest Rate Decision. At this point, the market expects that the Fed will be very dovish so the U.S. dollar is testing yearly lows.

In addition to the Fed, traders will have a chance to evaluate flash PMI readings for U.S. and EU. U.S. Manufacturing PMI is expected to decrease from 56.7 in November to 55.7 in December while Services PMI is projected to decline from 58.4 to 55.9.

Meanwhile, analysts expect that Euro Area Manufacturing PMI will decline from 53.8 to 53 while Euro Area Services PMI will increase from 41.7 to 41.9. The Euro Area Services PMI is especially interesting as it will indicate whether the services segment showed any signs of a rebound after the major blow dealt by the second wave of lockdowns.

Technical Analysis

EUR/USD managed to get above the resistance at 1.2155 an is trying to settle above the next resistance level at 1.2175. This is a very important moment for euro bulls as a move above the resistance at 1.2175 will likely allow EUR/USD to develop strong upside momentum.

In case EUR/USD settles above 1.2175, it will head towards the next resistance level at 1.2220. If EUR/USD gets above the resistance at 1.2220, it will head towards the resistance at 1.2250.

On the support side, the previous resistance at 1.2155 may serve as the first support level for EUR/USD. A move below this level will push EUR/USD towards the support at 1.2110. If EUR/USD declines below the support at 1.2110, it will get to the test of the next support level at 1.2090.

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