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EUR/USD Daily Forecast – Resistance At 1.1870 In Sight

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EUR/USD Video 21.10.20.

Euro Continues To Move Higher Against U.S. Dollar

EUR/USD gained strong upside momentum and is trying to get to the test of the resistance at 1.1870 as the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index is currently testing the nearest support level at 92.80 amid optimism about the U.S. stimulus deal. In case the U.S. Dollar Index manages to settle below the support at 92.80, it will gain additional downside momentum and decline towards 92.50 which will be bullish for EUR/USD.

There are no important economic reports scheduled to be released today in the U.S. and EU so traders will focus on U.S. stimulus negotiations and developments on the Brexit front, although the first days of this week brought no news about negotiations between EU and UK.

U.S. Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi have moved closer to a compromise, providing support to riskier assets and putting pressure on the American currency.

Currently, the market believes that Mnuchin and Pelosi will be able to negotiate a deal by the end of this week. If negotiations stall, the U.S. dollar will get a boost which will be bearish for EUR/USD.

Technical Analysis

EUR/USD has managed to get above the resistance at 1.1830 and is trying to settle above the next resistance level at 1.1870. If this attempt is successful, EUR/USD will head towards the major resistance level at 1.1910.

A move above 1.1910 will signal that EUR/USD will try to develop a new upside trend after several months of mostly range-bound trading action. In this case, EUR/USD will move towards the next resistance level at 1.1965.

In case EUR/USD settles above the resistance at 1.1965, it will get to the test of the psychologically important resistance level at 1.2000.

On the support side, the previous resistance at 1.1830 will likely serve as the first support level for EUR/USD. If EUR/USD declines below this support level, it will gain downside momentum and head towards the next support at 1.1780. A move below 1.1780 will open the way to the test of the major support level at 1.1750.

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

This article was originally posted on FX Empire

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