EUR/USD Daily Forecast – Test Of Resistance At 1.2250

EUR/USD Video 25.05.21.

Euro Moves Higher Against U.S. Dollar

EUR/USD is currently trying to settle above the resistance at 1.2250 while the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index has recently managed to get below the support at 89.75 and gained additional downside momentum. Currently, the U.S. Dollar Index is trying to get to the test of the next support at 89.50. If the U.S. Dollar Index declines below this level, it will move towards the support level at yearly lows at 89.20 which will be bullish for EUR/USD.

Today, foreign exchange market traders have a chance to take a look at economic data from Germany. First-quarter GDP Growth Rate report indicated that GDP declined by 1.8% quarter-over-quarter compared to analyst consensus which called for a decline of 1.7%. On a year-over-year basis, GDP declined by 3.1%.

Germany will also provide Ifo Business Climate report for May which is expected to show that Business Climate improved from 96.8 in April to 98.2 in May. It should be noted that Business Climate has steadily improved since the beginning of this year, and it managed to get back to pre-pandemic levels.

Technical Analysis

EUR/USD managed to settle above the resistance at 1.2220 and is testing the next resistance level at 1.2250. If this test is successful, EUR/USD will head towards the resistance which is located at 1.2280.

A successful test of the resistance at 1.2280 will push EUR/USD towards the next resistance at 1.2310. In case EUR/USD manages to settle above this level, it will head towards the resistance at at 1.2350.

On the support side, the previous resistance at 1.2220 will serve as the first support level for EUR/USD. If EUR/USD declines below this level, it will head towards the next support at 1.2175. There are no material levels between 1.2175 and 1.2220 so this move may be fast. If EUR/USD settles below 1.2175, it will head towards the next support at 1.2155.

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