EUR/USD Daily Forecast – Euro Remains Under Pressure

Euro Moves Lower Against U.S. Dollar

EUR/USD is currently trying to settle below 1.2100 while the U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index has managed to get back above the resistance at 90.50 and is testing the next significant resistance level at the 50 EMA at 90.80. If the U.S. Dollar Index manages to settle above this level, it will gain additional upside momentum which will be bearish for EUR/USD.

Today, foreign exchange market traders will focus on economic data from Germany. The recent Business Confidence report from Germany put significant pressure on the euro, and additional disappointing data may push euro to lower levels.

Germany‘s fourth-quarter GDP is expected to remain unchanged on a quarter-over-quarter basis. On a year-over-year basis, Germany’s GDP is expected to decline by 4% in the fourth quarter. Meanwhile, Unemployment Rate is projected to stay unchanged at 6.1% in January.

The market will closely monitor the situation in Europes leading economy as traders try to evaluate the impact of the current anti-virus measures. At this point, it looks like Euro Area economic peformance in the first quarter will be weaker than expected which puts euro under pressure.

Technical Analysis

EUR/USD is currently trading near the 1.2100 level. The nearest significant support for EUR/USD is located at 1.2080. If EUR/USD manages to settle below this level, it will head towards the next support level at 1.2060.

A successful test of this level will push EUR/USD towards the next support at 1.2040. If EUR/USD declines below the support at 1.2040, it will move towards the next support level at 1.2000.

On the upside, the nearest resistance level for EUR/USD is located at the 50 EMA at 1.2120. A move above the 50 EMA will push EUR/USD towards the next resistance level which is located at 1.2130. If EUR/USD gets above this level, it will head towards the next resistance at the 20 EMA at 1.2150.