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

EUR/USD Video 01.06.21.

Euro Attempts To Gain More Ground Against U.S. Dollar

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

The U.S. Dollar index is testing the support at 89.75. In case this test is successful, the U.S. Dollar Index will move towards the support at 89.50 which will be bullish for EUR/USD.

Today, foreign exchange market traders will have a chance to take a look at inflation data from EU. Analysts expect that Euro Area Inflation Rate increased by 1.9% year-over-year in May. Euro Area Core Inflation Rate is projected to grow by 0.8%.

Traders will also have a chance to take a look at the final reading of Euro Area Manufacturing PMI report for May which is expected to show that Euro Area Manufacturing PMI declined from 62.9 to 62.8.

Analysts expect that Euro Area Unemployment Rate remained unchanged at 8.1% in April, and it looks that European economy needs an additional boost to push Unemployment Rate closer to pre-pandemic levels.

Technical Analysis

EUR/USD managed to get above the resistance at 1.2220 and is moving towards the next resistance level which is located at 1.2250.

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

On the support side, the previous resistance at 1.2220 will serve as the first support level for EUR/USD. If EUR/USD gets back below this level, it will move towards 1.2200. A move below 1.2200 will open the way to the test of the support at the 20 EMA at 1.2175.

From a big picture point of view, EUR/USD received strong support near 1.2175 and continues its upside move. The U.S. dollar remains under significant pressure against a broad basket of currencies, and EUR/USD has good chances to gain additional upside momentum in the upcoming trading sessions.

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