EUR/USD Daily Forecast – Test Of Support At 1.2060

EUR/USD Video 04.03.21.

U.S. Dollar Tries To Gain More Ground Against Euro

EUR/USD is currently trying to settle below the support at 1.2060 while the U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index is trying to get to the test of the resistance level at 91.10. If the U.S. Dollar Index gets above this level, it will head towards the resistance at 91.30 which will be bearish for EUR/USD.

Yesterday, EU reported that Euro Area Services PMI increased from 45.4 in January to 45.7 in February compared to analyst consensus of 44.7. Numbers below 50 show contraction. The report was a bit better than expected, but it failed to provide additional support to euro.

Today, foreign exchange market traders will focus on Euro Area Retail Sales data. Analysts expect that Retail Sales declined by 1.1% month-over-month in January after growing by 2% in December. On a year-over-year basis, Retail Sales are projected to decrease by 1.2%.

Traders will also have a chance to take a look at Euro Area Unemployment Rate report for January. Unemployment Rate is projected to remain unchanged at 8.3%.

Technical Analysis

EUR/USD is testing the nearest support level at 1.2060. If this test is successful, EUR/USD will move towards the next support level which is located at 1.2040.

A move below 1.2040 will push EUR/USD towards the support at 1.2000. There are no important levels between 1.2000 and 1.2040 so this move may be fast. In case EUR/USD declines below the support at 1.2000, it will head towards the next support level at 1.1965.

On the upside, a move above 1.2060 will push EUR/USD towards the next resistance at 1.2080. If EUR/USD gets above this level, it will head towards the resistance level which is located at the 50 EMA at 1.2100. The 20 EMA is in the nearby, so this resistance level is set to be a material obstacle on the way up for EUR/USD.

If EUR/USD gets above the 50 EMA, it will gain additional upside momentum and head towards the next resistance level at 1.2130.

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