EUR/USD Daily Forecast – Trying To Stay Above 1.1800

EUR/USD Video 14.08.20.

U.S. Dollar Tries To Rebound

EUR/USD continues to trade above 1.1800 as the U.S. dollar is flat against a broad basket of currencies while traders wait for the release of GDP Growth Rate numbers for the Euro Area.

The U.S. Dollar Index is currently trying to settle above 93.20 and continue its journey towards 93.50. The main problem for the U.S. dollar right now is the complete uncertainty over U.S. stimulus negotiations.

Republicans and Democrats failed to reach consensus on the new coronavirus aid package deal, and it is unclear when these negotiations will be restarted.

Today, the U.S. will release Retail Sales report for July. Retail Sales are expected to grow by 1.9% month-over-month, and traders will be closely watching for signs that U.S. consumer activity may be faltering due to the persistently high number of new coronavirus cases in the U.S.

In the EU, traders will focus on the second estimate of GDP Growth Rate in the second quarter. Currently, analysts expect that Euro Area GDP declined by 15% on a year-over-year basis. Quarter-over-quarter, Euro Area GDP is projected to shrink by 12.1%.

In addition, traders will digest the Euro Area Employment Change report for the second quarter which is expected to show that employment declined by 1.7% on a year-over-year basis.

Technical Analysis

 

EUR/USD lost momentum as the U.S. dollar tries to rebound against the euro. The nearest support for EUR/USD is located at the previous resistance level at 1.1800.

In case EUR/USD declines below this level, it will head towards the next support at the 20 EMA at 1.1730. There are no significant levels between 1.1730 and 1.1800 so this move may be fast. A move below the 20 EMA will indicate that EUR/USD lost its upside momentum.

On the upside, the nearest resistance level is still located at 1.1880. Yesterday, EUR/USD faced material resistance just below this level.

In case EUR/USD is able to settle above 1.1880, it will head towards the next resistance level at the recent highs at 1.1910. At this point, it looks like EUR/USD will need strong catalysts to get above 1.1910 and continue the current upside move.

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