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

EUR/USD Video 07.09.20.

Traders Await ECB Interest Rate Decision On Thursday

EUR/USD continues its attempts to settle below the 20 EMA at 1.1840 as the U.S. dollar remains flat against a broad basket of currencies.

The U.S. Dollar Index is currently trying to settle above the key 93 level. In case this attempt is successful, U.S. Dollar Index will gain more upside momentum which will be bullish for EUR/USD.

This week, EUR/USD traders will be focused on European Central Bank Interest Rate Decision which is scheduled to be announced on Thursday. The key question is whether ECB is ready to deliver additional stimulus in order to push inflation higher and stop the rise of the euro.

Analysts wonder if ECB is ready to follow the U.S. Fed’s steps and announce that it plans to target an average inflation of 2%. Euro Area inflation has recently slipped into the negative zone, increasing risks of deflation.

However, it remains to be seen whether ECB can do anything about this as its options are limited. At the same time, failure to promise more easing will likely lead to another increase in the value of the euro which would be a negative development for the European economy.

Technical Analysis

EUR/USD is trying to gain more downside momentum as some traders are ready to place their bets on more easing from ECB ahead of its Interest Rate Decision on Thursday.

In case EUR/USD is able to settle below the 20 EMA at 1.1840, it will head towards the test of the next material support level at 1.1765. A move below this level will open the way to the test of the next significant support level at the 50 EMA at 1.1720.

On the upside, EUR/USD needs to get back above the 20 EMA to continue its upside move. In this scenario, EUR/USD will head towards the test of the next resistance level at 1.1910.

If EUR/USD manages to get above the resistance at 1.1910, it will gain more upside momentum and move towards the next resistance level at 1.1965.

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