EUR/USD Daily Forecast – Test Of Support At 1.1270

Euro Remains Under Pressure Against U.S. Dollar

EUR/USD is currently trying to settle below the support level at 1.1270 while the U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index is moving towards the resistance level at 96.25. A move above this level will open the way to the test of the resistance at 96.50 which will be bearish for EUR/USD.

Today, foreign exchange market traders will focus on the flash reading of the Euro Area Consumer Confidence report for November. Analysts expect that Euro Area Consumer Confidence declined from -4.8 in October to -5.5 in November.

It should be noted that Euro Area Consumer Confidence may find itself under more pressure due to coronavirus-related restrictions in European countries. Austria imposed full lockdown from Monday, and the market fears that Germany may soon follow Austria’s example.

These fears have put material pressure on the European currency in the recent trading sessions. This is not surprising as a wave of lockdowns will guarantee that ECB will remain extremely dovish for the upcoming months as it will need to provide additional support to the European economy.

Technical Analysis

EUR/USD is testing the support level at 1.1270. In case this test is successful, EUR/USD will move towards the next support level which is located at 1.1230.

A successful test of the support at 1.1230 will open the way to the test of the next support at 1.1200. In case EUR/USD declines below 1.1200, it will continue its downside move and head towards the next support level at 1.1170.

On the upside, EUR/USD needs to stay above 1.1270 to have a chance to develop upside momentum in the near term. The next resistance level for EUR/USD is located at 1.1300. If EUR/USD moves back above 1.1300, it will head towards the resistance at 1.1325. A successful test of the resistance at 1.1325 will push EUR/USD towards the resistance at 1.1350.

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