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EUR/USD Daily Forecast – Virus Worries Put Pressure On Euro

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EUR/USD Video 19.10.20.

U.S. Dollar Gains Ground Against Euro At The Start Of The Week

EUR/USD is losing some ground at the start of the week while the U.S. dollar is little changed against a broad basket of currencies.

On Friday, EU reported inflation data that was fully in line with the analyst consensus. Inflation Rate was -0.3% year-over-year in September while Core Inflation Rate was 0.2%. EU inflation remains weak which is not surprising given the negative impact of the pandemic.

Today, EU will provide Construction Output data for August. Analysts forecast that Construction Output will decline by 4.4%.

In addition to economic news, EUR/USD traders will pay attention to the latest developments on the coronavirus front in Europe. On Sunday, Italy reported 11,705 new cases which was a daily record.

Italian Prime Minister Guiseppe Conte stated that the situation was critical and provided mayors of Italian cities with the power to shut down public squares from 9 p.m.

At this point, it looks like traders are more worried about coronavirus than about Brexit. GBP/USD is gaining ground despite the lack of progress in Brexit negotiations, while EUR/USD is under some pressure.

Technical Analysis

EUR/USD continues its attempts to settle below the nearest support level at 1.1695. EUR/USD has already tested this level several times but the support at 1.1695 remained strong.

In case EUR/USD declines below this support level, it will gain downside momentum and move towards the next support level at 1.1630. RSI is in the moderate territory so there is plenty of room to develop momentum in case the right catalysts emerge.

If EUR/USD manages to settle below the support at 1.1630, it will head towards the next support level at 1.1580.

On the upside, the nearest resistance level for EUR/USD has emerged at 1.1720. In case EUR/USD settles above this level, it will gain upside momentum and head towards the major resistance level at 1.1750.

A move above the resistance at 1.1750 will signal that EUR/USD is ready to get back to the upside mode. In this case, EUR/USD will move towards the next resistance at 1.1780.

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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