EUR/USD Daily Forecast – U.S. Dollar Is Losing Some Ground Ahead Of Powell’s Speech

Euro Moves Higher Ahead Of The Weekend

EUR/USD is moving towards the resistance level at 1.1775 while the U.S. dollar is under some pressure against a broad basket of currencies.

The U.S. Dollar Index declined below the 93 level and is trying to get to the test of the support at the 20 EMA at 92.85. A move below this level will push the U.S. Dollar Index towards the support at the 50 EMA at 92.45 which will be bullish for EUR/USD.

It remains to be seen whether foreign exchange market traders are ready for big moves before Fed Chair Jerome Powell delivers his speech at the Jackson Hole Symposium.

Treasury yields have recently made an attempt to get above August highs but lost momentum and pulled back as bond traders remained cautious ahead of Powell’s speech.

The market will likely remain in a waiting mode, but volatility should increase once Powell begins to speak. While Powell is not expected to deliver material surprises, any changes in his narrative will have a significant impact on EUR/USD dynamics.

Technical Analysis

EUR/USD continues its attempts to settle above the resistance level at 1.1775. If EUR/USD manages to settle above this level, it will move towards the next resistance at 1.1800.

A successful test of the resistance at 1.1800 will lead to the test of the next resistance level which is located at the 50 EMA at 1.1810. In case EUR/USD moves above the 50 EMA at 1.1810, it will gain additional upside momentum and head towards the next resistance level at 1.1830.

On the support side, a move below the 20 EMA near 1.1760 will lead to the test of the support level at 1.1750. In case EUR/USD manages to settle below 1.1750, it will head towards the next support level which is located at 1.1720.

A successful test of the support at 1.1720 will push EUR/USD towards the support at 1.1690. If EUR/USD declines below this level, it will head towards the support level at 1.1660.

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