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EUR/USD Video 01.09.20.
Euro Continues Its Upside Move
EUR/USD made an attempt to settle above 1.2000 as the U.S. dollar continued to lose ground against a broad basket of currencies.
The U.S. Dollar Index gained significant downside momentum and settled below the 92 level as traders placed their bets on additional monetary easing from the Fed.
Back in 2018, the U.S. Dollar Index reached a low of 88.25, and there are few material levels between 88.25 and 92. In this situation, the U.S. Dollar Index has decent chances to gain more downside momentum which would be bullish for EUR/USD.
Today, traders will have a chance to evaluate important economic data for the Euro Area.
Manufacturing PMI is expected to decline from 51.8 in July to 51.7 in August.
Inflation Rate is projected to decrease from 0.4% to 0.2% on a year-over-year basis, while Core Inflation Rate is expected to drop from 1.2% to 0.8%.
Unemployment Rate for July is expected to grow from 7.8% to 8%.
While the reports are expected to show that the economic rebound is slowing down in Euro Area due to the continued problems on the coronavirus front, it remains to be seen whether it can stop the rise of the euro.
The market expects that the Fed will keep rates low for years which will lead to long-term pressure on the American currency.
Technical Analysis
EUR/USD has managed to get above the resistance at 1.1965 and continues its upside move. The next resistance for EUR/USD is located at 1.2000.
In case EUR/USD manages to settle above the resistance at 1.2000, it will gain additional upside momentum and head towards the next resistance at 1.2090.
The previous move above 1.2000, which happened back in 2018, was fast, so few material levels were formed between 1.2000 and 1.2250. Thus, EUR/USD has good chances to gain more upside momentum in case the right catalysts emerge.
On the support side, the previous resistance at 1.1965 will likely serve as the first important support level for EUR/USD. If EUR/USD manages to settle below this support level, it will head towards the next support at 1.1910.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire