EUR/USD Daily Forecast – Euro Tries To Break Above The Key Resistance Level

U.S. Dollar Remains Under Pressure

EUR/USD continues its attempts to settle above the key resistance area between the 50 EMA at 1.1740 and the 20 EMA at 1.1750 as the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index is currently testing the nearest support level at the 20 EMA at 93.65. The American currency is under pressure due to optimism about potential consensus on the new coronavirus aid package between Democrats and Republicans.

Today, EUR/USD traders will have a chance to evaluate the final reading of Euro Area Manufacturing PMI report for September and Euro Area Unemployment Rate report for August.

Manufacturing PMI is expected to increase from 51.7 in August to 53.7 in September. Meanwhile, Unemployment Rate is projected to increase from 7.9% in July to 8.1% in August due to continued problems in the services segment which is under pressure from coronavirus-related restrictions.

In the U.S., traders will focus on the Initial Jobless Claims and Continuing Jobless Claims reports. Yesterday, ADP Employment Change report provided hopes that the job market recovery continued at a steady pace.

If the new employment reports are also better than expected, the U.S. dollar may find itself under additional pressure as traders would increase purchases of riskier assets.

Technical Analysis

EUR/USD is currently trying to develop additional upside momentum above the 20 EMA at 1.1750. If this attempt is successful, EUR/USD will move closer to the next resistance level at 1.1830.

In case EUR/USD gets above the resistance at 1.1830, it will head towards the resistance at 1.1910. This resistance level was tested several times back in September and proved its strength. A move above the resistance at 1.1910 will open the way to the test of the next resistance at 1.1965.

On the support side, the nearest significant support level for EUR/USD is located at 1.1965. This support level has been tested during the previous trading session, and EUR/USD quickly rebounded back to the resistance area between the 50 EMA and the 20 EMA.

If EUR/USD settles below the support at 1.1695, it will gain downside momentum and head towards the next support level at 1.1630. #EUR/USD##FX#

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