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

Euro Is Moving Higher Against U.S. Dollar

EUR/USD has managed to settle back above the 20 EMA at 1.2175 while the U.S. dollar is under some pressure against a broad basket of currencies.

The U.S. Dollar Index is testing the nearest support level which is located at 90. A successful test of this level will push the U.S. Dollar Index towards the support at 89.75 which will be bullish for EUR/USD.

Yesterday, the European Central Bank left the interest rate unchanged. There were no surprises in the Bank’s commentary, and ECB Interest Rate Decision had minimal impact on EUR/USD.

Interestingly, U.S. inflation data failed to put pressure on EUR/USD despite the fact that U.S. Inflation Rate grew by 5% year-over-year in May compared to analyst consensus which called for growth of 4.7%.

Today, foreign exchange market traders will focus on preliminary Michigan Consumer Sentiment report for June. Analysts expect that Consumer Sentiment improved from 82.9 in May to 84 in June as the economy continued to grow.

Technical Analysis

EUR/USD is currently moving towards the resistance level at 1.2200. If EUR/USD manages to settle above this level, it will head towards the next resistance at 1.2220.

A successful test of the resistance at 1.2220 will open the way to the test of the next resistance level which is located at 1.2250. A move above this level will signal that EUR/USD will try to develop additional upside momentum.

On the support side, the nearest support level for EUR/USD is located at the 20 EMA at 1.2175. If EUR/USD gets below this level, it will move towards the next support at 1.2155.

A successful test of the support at 1.2155 will push EUR/USD towards the next support near the 50 EMA at 1.2130. If EUR/USD manages to settle below the 50 EMA, it will gain additional downside momentum and head towards the support at 1.2115.

From a big picture point of view, EUR/USD remains stuck in the range between the support at 1.2115 and the resistance at 1.2250, and it will need additional catalysts to get out of this range.

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