EUR/USD Daily Forecast – U.S. Dollar Tries To Continue Its Upside Move

EUR/USD Video 29.10.20.

Euro Little Changed Against U.S. Dollar After Yesterday’s Sell-Off

EUR/USD is flat after yesterday’s sell-off while the U.S. dollar is little changed against a broad basket of currencies.

The U.S. Dollar Index has recently made an attempt to settle above the 50 EMA at 93.55 but failed to gain additional momentum and declined below 93.50. If the U.S. Dollar Index moves above the 50 EMA, EUR/USD will find itself under pressure.

Yesterday, France announced a new national lockdown while Germany decided to close bars, restaurants and gyms in order to deal with the second wave of the virus.

Today, EU will provide Consumer Confidence report for October. Analysts expect that Consumer Confidence will decrease from -13.9 to -15.5. Most likely, Consumer Confidence will continue to trend down after the recent developments on the virus front. The only question is whether it will be a gradual decline or a sudden collapse in confidence, similar to the one that happened in April 2020.

In addition to Consumer Confidence, EUR/USD traders will focus on the European Central Bank Interest Rate Decision. Currently, analysts expect that ECB will not announce new stimulus measures but promise to take a new look at the situation in December. If ECB acts faster than expected, EUR/USD may move lower since any additional help from ECB will likely come in the form of money-printing.

Technical Analysis

EUR/USD is currently trying to settle below the support level at 1.1750. If this attempt is successful, it will get to another test of the next support level at 1.1720.

In case EUR/USD declines below 1.1720, it will move towards the major support level at 1.1695. A move below this level will push EUR/USD to the support at 1.1630. There are no material levels between 1.1630 and 1.1695 so this move may be fast.

On the upside, EUR/USD needs to get back above 1.1750 to develop upside momentum. The next resistance level is located at the 50 EMA at 1.1765. A move above this level will push EUR/USD towards the 20 EMA at 1.1780.

If EUR/USD manages to settle above the 20 EMA, it will gain additional upside momentum and head towards the resistance at 1.1830.

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