EUR/USD Daily Forecast – Test Of Support At 1.2200

EUR/USD Video 02.06.21.

Euro Declines Against U.S. Dollar

EUR/USD is curently trying to settle below the support at 1.2200 while the U.S. dollar is moving higher against a broad basket of currencies.

The U.S. Dollar Index is testing the resistance at the 90 level. In case this test is successful, the U.S. Dollar Index will move towards the next resistance at the 20 EMA at 90.20 which will be bearish for EUR/USD.

Yesterday, EU reported that Euro Area Manufacturing PMI increased from 62.9 to 63.1 compared to analyst consensus of 62.8. Inflation was a bit stronger than expected as Euro Area Inflation Rate increased by 2% year-over-year in May compared to analyst consensus of 1.9% while Euro Area Core Inflation Rate grew by 0.9% compared to analyst consensus of 0.8%. Meanwhile, Euro Area Unemployment Rate declined from 8.1% in March to 8% in April.

Today, foreign exchange market traders will have a chance to take a look at the latest Producer Prices data from the EU. Analysts expect that Euro Area Producer Prices increased by 0.9% month-over-month in April. On a year-over-year basis, Producer Prices are projected to grow by 7.3%.

Technical Analysis

EUR/USD managed to settle below the support at 1.2220 and is trying to settle below the next support level at 1.2200. In case this attempt is successful, it will head towards the support which is located at near the 20 EMA at 1.2175. Most likely, EUR/USD will get significant support at this level.

A successful test of the support at the 20 EMA will open the way to the test of the support at 1.2155. In case EUR/USD declines below this level, it will move towards the support at 1.2130.

On the upside, the previous support level at 1.2220 will serve as the first resistance level for EUR/USD. If EUR/USD manages to get back above this level, it will head towards the next resistance at 1.2250. A move above this level will open the way to the test of the resistance at 1.2280.

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