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EUR/USD Daily Forecast – U.S. Dollar Lacks Momentum At The Start Of The Week

Vladimir Zernov
2 min read

In This Article:

EUR/USD Video 01.02.21.

Euro Is Mostly Flat Against U.S. Dollar

EUR/USD is currently trying to settle below the support at the 50 EMA at 1.2120 while the U.S dollar is flat against a broad basket of currencies.

The U.S. Dollar Index has recently made an attempt to settle below the support level at 90.50 but failed to develop sufficient downside momentum. The nearest significant resistance level for the U.S. Dollar Index is located at the 50 EMA at 90.75. If the U.S. Dollar Index gets above this level, it will gain additional upside momentum which will be bearish for EUR/USD.

Today, EU will provide the final reading of the Manufacturing PMI report for January. Analysts expect that Manufacturing PMI declined from 55.2 to 54.7. In addition, foreign exchange market traders will have a chance to take a look at the Euro Area Unemployment Rate report for December. Unemployment Rate is projected to remain unchanged at 8.3% despite the negative impact of the second wave of the virus.

Technical Analysis

EUR/USD continues its attempts to settle below the nearest support level which is located at the 50 EMA at 1.2120. If EUR/USD declines below this level, it will head towards the next support at 1.2080.

A successful test of the support at 1.2080 will open the way to the test of the next support level at 1.2060. If EUR/USD gets below the support at 1.2060, it will move towards the next support at 1.2040.

On the upside, the nearest significant resistance level for EUR/USD is located at the 20 EMA at 1.2145, although EUR/USD may also face some resistance at 1.2130. If EUR/USD settles above the resistance at the 20 EMA, it will get to the test of the next resistance level at 1.2155. A successful test of this level will push EUR/USD towards the next resistance at 1.2175.

From a big picture point of view, EUR/USD is stuck in a tight range between the 50 EMA and the 20 EMA, and a move out of this range will allow EUR/USD to gain more momentum.

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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