EUR/USD Daily Forecast – U.S. Dollar Remains Under Pressure

EUR/USD Video 13.01.21.

Euro Continues To Move Higher Against U.S. Dollar

EUR/USD is currently testing the resistance at 1.2220 while the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index continues its attempts to settle below the 90 level. U.S. Treasury yields, whose rally provided support for the American currency, have fallen from recent highs, putting pressure on the dollar. If the U.S. Dollar Index manages to settle below the 90 level, it will gain downside momentum and move towards the next support level at 89.75 which will be bullish for EUR/USD.

Today, EU will provide Euro Area Industrial Production report for November. Analysts expect that Industrial Production increased by 0.2% month-over-month. On a year-over-year basis, Industrial Production is projected to decline by 3.3%.

In the U.S., foreign exchange market traders will focus on inflation data for December. Inflation Rate is projected to grow by 1.3% year-over-year while Core Inflation Rate is expected to increase by 1.6%.

The market will also pay attention to the latest developments on the U.S. political front as Democrats are trying to impeach the U.S. President Donald Trump. Traders have mostly ignored the recent turmoil in Washington, and it remains to be seen whether the market will react to any impeachment news.

Technical Analysis

EUR/USD is currently trying to settle above the resistance level at 1.2220. If EUR/USD manages to settle above this level, it will gain upside momentum and move towards the next resistance at 1.2250.

A successful test of the resistance at 1.2250 will push EUR/USD towards the resistance at 1.2280. In case EUR/USD settles above the resistance at 1.2280, it will head towards the next resistance level at 1.2310.

On the support side, a move below the 20 EMA at 1.2215 will open the way to the test of the support at 1.2175. If EUR/USD declines below this support level, it will move towards the next support at 1.2155. A successful test of this level will push EUR/USD towards the support level which is located at the recent lows at 1.2130.

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