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EUR/USD Daily Forecast – U.S. Dollar Tries To Rebound

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EUR/USD Video 22.10.20.

U.S. Dollar Gains Some Ground Amid Doubts About U.S. Stimulus

EUR/USD is pulling back after yesterday’s upside move as the U.S. dollar is gaining ground against a broad basket of currencies.

Yesterday, EUR/USD gained ground on optimism about Brexit deal between UK and EU. Today, the U.S. dollar is trying to rebound as the market is worried that U.S. lawmakers will fail to reach a compromise deal on the new coronavirus aid package before the November election.

The U.S. Dollar Index is currently trying to get above the nearest resistance level at 92.80. If this attempt is successful, the U.S. Dollar Index will gain additional upside momentum which will be bearish for EUR/USD.

Today, traders will also focus on the upcoming U.S. Initial Jobless Claims and Continuing Jobless Claims reports which are expected to highlight some minor progress on the job front.

Meanwhile, U.S. stimulus negotiations will likely remain the key driver for EUR/USD in the upcoming days. If Republicans and Democrats manage to negotiate a deal, riskier assets will get additional support while the American currency will find itself under pressure which will be bullish for EUR/USD.

Technical Analysis

EUR/USD failed to settle above the nearest resistance level at 1.1870 and declined below 1.1850. The nearest support level for EUR/USD is located at 1.1830. If EUR/USD gets below this level, it will gain downside momentum and head towards the next support level at 1.1780.

A move below the support at 1.1780 will open the way to the test of the major support level at 1.1750. I’d note that the 20 EMA and the 50 EMA are located in the 1.1750 – 1.1780 area so this range has the potential to serve as a very strong support area for EUR/USD.

On the upside, EUR/USD needs to get above the resistance at 1.1870 to continue its upside move. If EUR/USD settles above 1.1870, it will gain additional upside momentum and head towards the major resistance level at 1.1910.

In case EUR/USD gets above 1.1910, it will continue its upside move and get to the test of the resistance at 1.1965.

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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