EUR/USD Daily Forecast – U.S. Dollar Is Losing Some Ground Against Euro

Euro Tries To Gain Ground Against U.S. Dollar

EUR/USD continues its attempts to settle above 1.1610 while the U.S. dollar is losing some ground against a broad basket of currencies.

The U.S. Dollar Index is trying to settle below the support at the 20 EMA at 93.80. In case the U.S. Dollar Index declines below this level, it will move towards the next support at 93.50 which will be bullish for EUR/USD.

Today, foreign exchange market traders will have a chance to take a look at the final reading of Euro Area Consumer Confidence report for October. The report is expected to show that Euro Area Consumer Confidence decreased from -4 in September to -4.8 in October.

Euro Area Industrial Sentiment is projected to decline from 14.1 in September to 13.2 in October, while Euro Area Services Sentiment is expected to decrease froom 15.1 to 14.

The main event of the day for EUR/USD is the ECB Interest Rate Decision and the subsequent press conference. The key question is whether ECB shows any signs of worry about inflation. In case ECB stays ultra-dovish at a time when the Fed looks ready to reduce its asset purchase program, the U.S. dollar will get more support against euro.

Technical Analysis

EUR/USD is currently testing the resistance level at 1.1610. If this test is successful, EUR/USD will move towards the 20 EMA which is located near 1.1620.

A move above the resistance level at the 20 EMA will push EUR/USD towards the next resistance level at 1.1630. In case EUR/USD gets above 1.1630, it will continue its upside move and head towards the next resistance at 1.1660.

On the support side, EUR/USD needs to settle below the support at 1.1580 to have a chance to develop downside momentum in the near term. The next support level for EUR/USD is located at 1.1560. If EUR/USD manages to settle below the support at 1.1560, it will get to the test of the next support level at 1.1540.

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