EUR/USD Daily Forecast – Test Of Resistance Area Between 20 EMA and 50 EMA

Euro Tries To Continue Its Upside Move

EUR/USD is trying to settle above the resistance at the 20 EMA at 1.1750 while the U.S. dollar is mostly flat against a broad basket of currencies.

The U.S. Dollar Index is little changed after yesterday’s presidential debate, although it made an attempt to gain some upside momentum and settle above the 94 level. The debate was rather chaotic, and the currency markets are undecided about how to react to its results.

Meanwhile, U.S. House Speaker Nancy Pelosi stated that she hoped that Democrats and Republicans could reach consensus on the new coronavirus aid package deal.

Interestingly, traders decided to ignore this statement. The U.S. dollar did not gain much upside momentum, while S&P 500 futures are currently down by almost 1% in premarket trading.

Today, markets will focus on U.S. ADP Employment Change report which is expected to show that private sector added 650,000 jobs in September. In addition, U.S. is expected to report that the country’s GDP declined by 31.7% quarter-over-quarter in the second quarter of this year.

In addition U.S. will provide Pending Home Sales report for August. Analysts expect that Pending Home Sales increased by 3.4% month-over-month.

Technical Analysis

EUR/USD is currently testing the resistance area between the 50 EMA at 1.1740 and the 20 EMA at 1.1750.

This resistance area is set to be strong, but EUR/USD may have a good chance to get above this area in case the U.S. Dollar Index heads towards its 20 EMA at 93.65.

If EUR/USD manages to settle above the 20 EMA, it will gain additional upside momentum and head towards the next resistance level near 1.1830.

On the support side, the nearest support level for EUR/USD is located at 1.1695. In case EUR/USD gets below this level, it will gain downside momentum and move towards the next support at the recent lows at 1.1630.

From a big picture point of view, EUR/USD will have a good chance to get back to the upside mode in case it is able to get above the 20 EMA. #EUR/USD##FX#

Reprinted from Fxempire，the copyright all reserved by the original author.