EUR/USD Daily Forecast – Test Of Support At 1.1720

Euro Is Under Pressure Against U.S. Dollar

EUR/USD is currently trying to settle below the support at 1.1720 while the U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index has recently managed to get above the resistance at 93.10 and is trying to develop additional upside momentum. The next resistance level for the U.S. Dollar Index is located at 93.40. In case the U.S. Dollar Index gets to the test of this level, EUR/USD will get more support.

Germany has recently released final inflation data for July. Inflation Rate increased by 3.8% year-over-year. On a month-over-month basis, Inflation Rate grew by 0.9%. Inflation data was in line with the analyst consensus and had little impact on EUR/USD dynamics.

The key event of the day for foreign exchange market traders is the release of U.S. inflation data which may have a significant impact on EUR/USD. Analysts expect that Inflation Rate increased by 5.3% year-over-year in July while Core Inflation Rate grew by 4.3%. In case inflation exceeds analyst expectations, U.S. dollar will get more support.

Technical Analysis

EUR/USD settled below the support at 1.1750 and is trying to settle below the next support level at 1.1720. In case this attempt is successful, EUR/USD will move towards the next support which is located at 1.1690.

A move below the support at 1.1690 will open the way to the test of the support at 1.1660. If EUR/USD settles below this level, it will head towards the next support at 1.1625. A successful test of the support at 1.1625 will open the way to the test of the support at 1.1600.

On the upside, the previous support at 1.1750 will serve as the first resistance level for EUR/USD. In case EUR/USD manages to settle back above this level, it will head towards the next resistance at 1.1775. A move above 1.1775 will push EUR/USD towards the resistance which is located at the 20 EMA at 1.1800.

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