EUR/USD Daily Forecast – Test Of Support At 1.1350

Euro Pulls Back After Yesterday’s Rally

EUR/USD is currently trying to settle back below the support at 1.1350 while the U.S. dollar is gaining some ground against a broad basket of currencies.

The U.S. Dollar Index has recently made an attempt to settle above 95.65 but failed to develop sufficient upside momentum and pulled back. The nearest material support level for the U.S. Dollar Index is located at 95.40. In case the U.S. Dollar Index gets to the test of this level, EUR/USD will get more support.

Germany has recently released Producer Prices data for October. The report indicated that Producer Prices increased by 3.8% month-over-month compared to analyst consensus of 1.9%. On a year-over-year basis, Producer Prices grew by 18.4% compared to analyst consensus which called for growth of 16.2%.

It remains to be seen whether stronger-than-expected Producer Prices data from Germany will provide additional support to euro on the foreign exchange market. ECB remains very dovish, and it is not clear whether rising Producer Prices in Europe’s leading economy will have any impact on its position.

Technical Analysis

EUR/USD has recently made an attempt to settle above the resistance at 1.1370 but failed to develop sufficient upside momentum and pulled back. In case EUR/USD declines below the support at 1.1350, it will move towards the next support level at 1.1325.

A successful test of the support at 1.1325 will push EUR/USD towards the support at 1.1300. If EUR/USD manages to settle below this level, it will move towards the next support at 1.1270.

On the upside, a move above the resistance at 1.1370 will push EUR/USD towards the next resistance level which is located at 1.1400. In case EUR/USD gets above the resisance at 1.1400, it will continue its rebound and head towards the resistance at 1.1435. A successful test of the resistance at 1.1435 will open the way to the test of the next resistance near the 20 EMA at 1.1460.

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