EUR/USD Daily Forecast – U.S. Dollar Is Under Pressure Ahead Of Inflation Data

Euro Moves Higher Against U.S. Dollar

EUR/USD is currently trying to settle above the resistance at 1.1830 while the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index has recently managed to get below the 20 EMA at 92.60 and is moving towards the 50 EMA at 92.45. In case the U.S. Dollar Index declines below the 50 EMA, it will gain additional downside momentum and head towards the support at 92.30 which will be bullish for EUR/USD.

There are no important economic reports scheduled to be released in the EU today so foreign exchange market traders will focus on inflation data from the U.S.

Analysts expect that Inflation Rate increased by 5.3% year-over-year in August while Core Inflation Rate grew by 4.2%. These reports may have a significant impact on currency dynamics as they will show whether inflation remains under control. Fed Chair Jerome Powell has previously stated that higher inflation was a temporary phenomenon. In case inflation reports meet analyst expectations, Fed will have an opportunity to postpone the reduction of its asset purchase program, which will be bearish for the American currency.

Technical Analysis

EUR/USD managed to get above the 50 EMA near 1.1825 and is trying to settle above the resistance at 1.1830. In case this attempt is successful, it will move towards the next resistance level which is located at 1.1860.

A move above the resistance at 1.1860 will open the way to the test of the next resistance at 1.1880. In case EUR/USD manages to get above this level, it will head towards the resistance at 1.1900.

On the support side, a move below the 50 EMA will push EUR/USD towards the 20 EMA which is located at 1.1815. If EUR/USD declines below this level, it will head towards the next support level at 1.1800. A successful test of the support at 1.1800 will open the way to the test of the next support at 1.1775.

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