EUR/USD Daily Forecast – Test Of Support At 1.1300

Euro Is Losing Ground Against U.S. Dollar

EUR/USD is currently trying to settle below the support at 1.1300 while the U.S. dollar is moving higher against a broad basket of currencies.

The U.S. Dollar Index is testing the resistance level at 96.25. In case the U.S. Dollar Index manages to settle above 96.25, it will move towards the next resistance at 96.50 which will be bearish for EUR/USD.

Yesterday, EU released Euro Area Producer Prices report which indicated that Euro Area Producer Prices increased by 5.4% month-over-month in October compared to analyst consensus which called for growth of 3.5%. On a year-over-year basis, Euro Area Producer Prices grew by 21.9% compared to analyst consensus of 19%. The report failed to provide additional support to euro as traders bet that ECB would stay dovish.

Today, foreign exchange market traders will take a look at the final reading of Euro Area Services PMI report which is projected to show that Euro Area Services PMI increased from 54.6 in October to 56.6 in November.

Traders will also focus on Euro Area Retail Sales report. Analysts expect that Euro Area Retail Sales increased by 0.2% month-over-month in October after falling by 0.3% in September. On a year-over-year basis, Euro Area Retail Sales are projected to grow by 1.2%.

In the U.S., the main economic event of the day is the release of Non Farm Payrolls report which is projected to show that U.S. economy added 550,000 jobs in November.

It’s a busy day on the economic calendar, so traders should be prepared for volatility.

Technical Analysis

EUR/USD is testing the support level at 1.1300. In case this test is successful, EUR/USD will move towards the next support level which is located at 1.1270.

A move below 1.1270 will push EUR/USD towards the support at 1.1230. If EUR/USD declines below this level, it will head towards the support level at 1.1200.

On the upside, EUR/USD needs to get back above 1.1300 to have a chance to develop upside momentum in the near term. The next resistance level for EUR/USD is located at 1.1325. If EUR/USD settles back above this level, it will head towards the resistance at the 20 EMA at 1.1340.

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