EUR/USD Daily Forecast – Test Of The Key Support At 1.1750

EUR/USD Video 14.10.20.

Euro Remains Under Pressure

EUR/USD is currently trying to settle below the major support level at 1.1750 as fears about a no-deal Brexit put pressure on the euro. GBP/USD is also under pressure since a no-deal scenario will be bad for both EU and UK.

EU and UK officials have indicated that no deal was better than a bad deal. As Brexit talks enter their final stage, the market is increasingly nervous about the outcome of negotiations which puts pressure on EUR/USD.

Meanwhile, the U.S. Dollar Index, which measures the strength of the U.S. dollar against a broad basket of currencies, is trying to continue its upside move. The U.S. Dollar Index has managed to move above the 20 EMA at 93.55 and is trying to get closer to the 50 EMA at 93.75. In case the U.S. Dollar Index gains additional upside momentum, EUR/USD will find itself under increased pressure.

Today, EUR/USD traders will have a chance to take a look at Euro Area Industrial Production data for August. On a month-over-month basis, Industrial Production is expected to increase by 0.8%.

Technical Analysis

 

EUR/USD gained strong downside momentum and is testing the key support level at 1.1750. RSI is in the moderate territory so there is plenty of room to gain downside momentum in case the right catalysts emerge.

If EUR/USD manages to settle below the support at 1.1750, it will continue its downside move and decline towards the next support level at 1.1695. There are no material levels between 1.1695 and 1.1750 so this move may be fast.

If EUR/USD is able to settle below the support at 1.1695, it will move towards the support level which is located near September lows at 1.1630.

On the upside, the 20 EMA at 1.1765 will likely serve as the first resistance level for EUR/USD. In case EUR/USD manages to settle above this level, it will gain upside momentum and head towards the recent highs at 1.1830. The resistance at 1.1830 has proved its strength so EUR/USD will likely need strong upside catalysts to move above this level.

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