EUR/USD Daily Forecast – U.S. Dollar Tries To Gain Ground Against Euro

EUR/USD Video 16.03.21.

Euro Is Mostly Flat Against U.S. Dollar

EUR/USD continues its attempts to settle below the support at 1.1925 while the U.S. dollar is flat against a broad basket of currencies.

The U.S. Dollar Index managed to settle above the support at 91.75  but failed to get to the test of the nearest significant resistance level at 92. In case the U.S. Dollar Index gets above the resistance at 92, it will gain upside momentum and head towards the next resistance at 92.25 which will be bearish for EUR/USD.

Today, foreign exchange market traders will have a chance to take a look at Euro Area Economic Sentiment Index which is expected to grow from 69.6 to 74.5. The key question right now is whether improvements in the economic sentiment are sustainable as Europe is potentially facing a third wave of the virus.

According to Germany’s Robert Koch Institute, coronavirus has started to spread exponentially in Germany. Meanwhile, Italy was forced to introduce new restrictions as the number of new coronavirus cases began to grow again in March. The relative weakness of the European economy served as a major bearish catalyst for the euro in recent months, and additional problems on the coronavirus front may put more pressure on the European currency.

Technical Analysis

EUR/USD is testing the nearest support level at 1.1925. If EUR/USD manages to settle below this level, it will head towards the next support which is located at 1.1900.

In case EUR/USD declines below the support at 1.1900, it will head towards the next support level at 1.1880. A move below the support at 1.1880 will open the way to the test of the support at 1.1850.

On the upside, the nearest resistance level for EUR/USD is located at 1.1965. This resistance level has been tested during yesterday’s trading session and proved its strength. In case EUR/USD gets above the resistance at 1.1965, it will move towards the next resistance level at the 20 EMA at 1.1985. A move above this level will push EUR/USD towards the resistance at 1.2000.

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