EUR/USD Daily Forecast – U.S. Dollar Gains Ground Against Euro
EUR/USD Video 13.10.20.
Euro Pulls Back After The Recent Upside Move
EUR/USD is currently trying to settle below 1.1800 as the U.S. Dollar Index is testing the nearest resistance area at 93.20 – 93.25.
The U.S. Dollar Index, which measures the strength of the U.S. dollar against a broad basket of currencies, failed to settle below the 93 level and is trying to gain upside momentum.
In case the U.S. Dollar Index gets above 93.25, it will move towards the 20 EMA at 93.50 which will be bearish for EUR/USD.
Today, EUR/USD traders will focus on inflation data from the U.S. Inflation Rate is expected to increase from 1.3% in August to 1.4% in September on a year-over-year basis. Core Inflation Rate is projected to grow from 1.7% to 1.8%.
EU will report its inflation data on Friday. Core Inflation Rate is projected to decrease from 0.4% in August to 0.2% in September while Inflation Rate is expected to drop from -0.2% to -0.3%. If the gap between U.S. inflation and EU inflation widens, the market will start to evaluate whether the Fed will have to start raising rates ahead of ECB.
EUR/USD did not manage to get above the nearest resistance level at 1.1830 and pulled back below 1.1800.
The nearest support level for EUR/USD is located at the 20 EMA at 1.1770. In case EUR/USD manages to settle below this level, it will head towards the test of the major support level at the 50 EMA at 1.1750.
A move below the 50 EMA will signal that EUR/USD lost its upside momentum and is ready to get back to the downside mode. If this happens, EUR/USD will develop downside momentum and decline closer to the support level at 1.1695.
On the upside, the nearest resistance level for EUR/USD is located at 1.1830. There are no material levels between the 20 EMA at 1.1770 and the resistance at 1.1830 so EUR/USD may quickly get to another test of the nearest resistance level if the right catalysts emerge.
If EUR/USD manages to settle above 1.1830, it will gain upside momentum and head towards the major resistance level at 1.1910.
For a look at all of today’s economic events, check out our economic calendar.