EUR/USD Daily Forecast – U.S. Dollar Moves Lower Ahead Of ADP Employment Change Report
Euro Gains Ground Against U.S. Dollar
EUR/USD is currently trying to get back above 1.1300 while U.S. dollar is moving lower against a broad basket of currencies.
The U.S. Dollar Index is slowly moving towards the support level at 96. If U.S. Dollar Index manages to get below this level, it will gain downside momentum and head towards the support at 95.75 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 Services PMI report for December. Analysts expect that Euro Area Services PMI declined from 55.9 in November to 53.3 in December.
In the U.S., traders will focus on ADP Employment Change report which is projected to show that private businesses added 400,000 jobs in December. This report may have a significant impact on EUR/USD dynamics. If the report exceeds analyst expectations, U.S. dollar may get more support as stronger job market will likely lead to additional inflationary pressure.
EUR/USD received support near 1.1270 and rebounded towards the resistance level at 1.1300. If EUR/USD settles above this level, it will move towards the next resistance at the 20 EMA near 1.1315.
A move above the resistance at the 20 EMA will push EUR/USD towards the next resistance at 1.1330. If EUR/USD manages to settle above this level, it will head towards the resistance which is located near the 50 EMA at 1.1350.
On the support side, EUR/USD needs to get below the support at 1.1270 to have a chance to gain downside momentum in the near term. The next support level for EUR/USD is located at 1.1230.
The test of this support level will be a major event for EUR/USD traders as a move below 1.1230 will indicate that EUR/USD is ready to gain sustainable downside momentum. In this case, EUR/USD may quickly get to the test of the next support level which is located at 1.1200.
For a look at all of today’s economic events, check out our economic calendar.