EUR/USD Daily Forecast – Test Of Support At 1.2130

EUR/USD Video 14.01.21.

Euro Is Under Pressure Against U.S. Dollar

EUR/USD is currently trying to settle below the support level at 1.2130 while the U.S. dollar is gaining some ground against a broad basket of currencies.

The U.S. Dollar Index is trying to get to the test of the nearest resistance level at 90.50. If the U.S. Dollar Index manages to settle above this level, it will head towards the resistance at 90.70 which will be bearish for EUR/USD.

Yesterday, EU reported that Euro Area Industrial Production grew by 2.5% month-over-month in November compared to analyst consensus which called for growth of just 0.2%.

The surprising strength of the Euro Area Industrial Production did not provide support to the euro as foreign exchange market traders focused on Europe’s problems on the coronavirus front.

The recent data showed that situation in Spain, France, Germany, Italy remained challenging so European countries will likely have to keep virus containment measures for the upcoming weeks which will inevitably put additional pressure on the European economy.

Technical Analysis

EUR/USD managed to get below the support at 1.2155 and attempts to settle below the next support level at 1.2130. If EUR/USD declines below the support at 1.2130, it will move towards the next support level which is located at the 50 EMA at 1.2115.

A successful test of the support at the 50 EMA will open the way to the test of the next support level at 1.2080. No important levels were formed between the support at 1.2080 and the 50 EMA at 1.2115 so this move may be fast. In case EUR/USD settles below the support at 1.2080, it will head towards the next support level at 1.2060.

On the upside, the previous support at 1.2155 will likely serve as the first resistance level for EUR/USD. If EUR/USD gets above this level, it will head towards the next resistance at 1.2175. A move above the resistance at 1.2175 will push EUR/USD towards the resistance at the 20 EMA at 1.2200.

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