EUR/USD Daily Forecast – U.S. Dollar Stabilizes After Recent Volatility
Euro Is Mostly Flat Against U.S. Dollar
EUR/USD has recently made another attempt to settle above the resistance at 1.1325 but failed to develop sufficient upside momentum and pulled back while the U.S. dollar remained flat against a broad basket of currencies.
The U.S. Dollar Index is currently trying to settle back above the 96 level. If this attempt is successful, it will move towards the next resistance at 96.25 which will be bearish for EUR/USD.
Today, foreign exchange market traders will focus on the economic data from EU. Analysts expect that Euro Area Unemployment Rate declined from 7.4% in September to 7.3% in October.
Euro Area Producer Prices report is expected to show that Producer Prices increased by 3.5% month-over-month in October. On a year-over-year basis, Euro Area Producer Prices are projected to grow by as much as 19%.
The recent Euro Area Inflation Rate report showed that Inflation Rate increased by 4.9% year-over-year in November compared to analyst consensus of 4.5%. The report provided support to euro, so a stronger-than-expected Euro Area Producer Prices report may also provide a boost to the European currency. However, traders should keep in mind that ECB remains dovish while the Fed has recently indicated that it could cut its asset purchase program at a faster pace.
EUR/USD continues its attempts to settle above the resistance level at 1.1325. In case EUR/USD manages to settle above this level, it will move towards the resistance at the 20 EMA at 1.1345.
A move above 1.1345 will push EUR/USD towards the resistance at 1.1370. In case EUR/USD gets above this level, it will head towards the next resistance level at 1.1400.
On the support side, the nearest material support level for EUR/USD is located at 1.1300. If EUR/USD declines below this level, it will head towards the next support at 1.1270.
A successful test of the support at 1.1270 will push EUR/USD towards the support at 1.1230. In case EUR/USD manages to settle below this level, it will head towards the next support at 1.1200.
For a look at all of today’s economic events, check out our economic calendar.