EUR/USD Daily Forecast – U.S. Dollar Is Moving Lower Against Euro

EUR/USD

Euro Tries To Gain More Ground Against U.S. Dollar

EUR/USD continues its attempts to settle above the resistance at 1.2175 while the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index is trying to settle below the nearest support level at 90. This support level has already proven its strength, but the pressure on the U.S. dollar remains high. In case the U.S. Dollar Index declines below this level, it will move towards the support at 89.75 which will be bullish for EUR/USD.

Today, EU will provide the final reading of Euro Area Consumer Confidence report for February. Analysts expect that Consumer Confidence improved from -15.5 in January to -14.8 in February but remained in the negative territory due to continued problems on the coronavirus front.

Euro Area Industrial Sentiment is projected to grow from -5.9 in January to -5 in February while Euro Area Services Sentiment is expected to decline from -17.8 to -18.1.

Technical Analysis

EUR/USD is currently testing the nearest resistance level at 1.2175. This resistance level has already been tested many times and proved its strength. RSI remains in the moderate territory, and there is plenty of room to gain additional momentum in case the right catalysts emerge.

If EUR/USD manages to settle above the resistance at 1.2175, it will gain upside momentum and head towards the next resistance level which is located at 1.2220. A similar setup was formed back in December 2020, and EUR/USD managed to gain strong upside momentum once it settled above 1.2175. A move above the resistance at 1.2220 will open the way to the test of the resistance at 1.2250.

On the support side, the nearest support for EUR/USD is located at 1.2155. If EUR/USD declines below this level, it will head towards the 20 EMA which is located at 1.2125. A move below the 20 EMA will lead to the test of the next support level at the 50 EMA at 1.2115.