EUR/USD Daily Forecast – U.S. Dollar Remains Under Pressure
The U.S. Dollar Index continues its attempts to get below the strong support level at 92.80. In case the U.S. Dollar Index manages to settle below this level, it will gain more downside momentum which will be bullish for EUR/USD.
Today, EUR/USD trading dynamics will mostly depend on general market sentiment since neither U.S. nor EU will release any important economic reports.
European Central Bank President Christine Lagarde is scheduled to speak later today but the market does not expect any surprises from this speech.
At this point, the worsening situation on the coronavirus front in Europe did not put any pressure on the euro. However, some European countries start to reimpose virus containment measures and the confidence in the recovery of the European economy may decline.
On Wednesday, traders will have a chance to evaluate the speed of this recovery as EU will provide flash readings of Euro Area Manufacturing PMI and Services PMI for September.
Manufacturing PMI is expected to increase from 51.7 to 51.9 while Services PMI is projected to stay flat at 50.5. Any weakness in Euro Area PMI reports may put pressure on EUR/USD.
Technical Analysis
EUR/USD continues its attempts to get to the test of the nearest resistance level at 1.1910. This level has already been tested several times in September and proved its strength.
In case EUR/USD manages to settle above 1.1910, it will gain more upside momentum and head towards the next resistance at 1.1965. A successful test of the resistance at 1.1965 will open the way to the test of the next resistance at 1.2000.
On the support side, the 20 EMA at 1.1840 still serves as the main support level for EUR/USD. A move below the 20 EMA may lead to a sell-off and push EUR/USD closer to the next important support level at the 50 EMA at 1.1765.
From a big picture point of view, EUR/USD remains range-bound between the support at 1.1765 and the resistance at 1.1910, and it will likely gain strong momentum once it moves out of this range.