EUR/USD Daily Forecast – Resistance At 1.1830 In Sight

06 Oct 2020, 16:23 · Views 398

Euro Continues Its Upside Move

EUR/USD managed to get above the major resistance level at 1.1750 and continued its upside move as the U.S. Dollar Index declined below 93.50.

The U.S. Dollar Index, which measures the strength of the U.S. Dollar against a broad basket of currencies, is moving lower as demand for safe haven assets decreased after U.S. President Donald Trump returned back to the office after being hospitalized with COVID-19 for several days.

Yesterday, EU reported that Euro Area Services PMI declined from 50.5 in August to 48 in September compared to analyst consensus of 47.6. Numbers below 50 show contraction.

The EU services segment is under significant pressure due to the challenging situation on the coronavirus front, and the business mood may get worse as European countries continue to impose new anti-virus measures which hurt businesses.

Meanwhile, Euro Area Retail Sales showed strength, increasing by 4.4% month-over-month in August. On a year-over-year basis, Retail Sales gained 3.7%. While the Retail Sales report was encouraging, it remains to be seen whether this trend will continue in September as virus worries could have hurt consumer activity.

Technical Analysis

EUR/USD broke above the key resistance at 1.1750 and gained additional upside momentum. Currently, EUR/USD is trying to move above 1.1800.

The nearest significant resistance level for EUR/USD is located at 1.1830. RSI is in the moderate territory, and there is plenty of room to gain additional momentum in case the right catalysts emerge.

A successful test of the resistance at 1.1830 will open the way to the next resistance level at 1.1910. There are no material levels between 1.1830 and 1.1910 so this move may be fast.

In case EUR/USD manages to settle above the resistance at 1.1910, it will head towards the next resistance level at 1.1965.

On the support side, the previous resistance level at 1.1750 will serve as the first support level for EUR/USD. The 50 EMA is located at 1.1740, providing additional support in this area.

In case EUR/USD gets below the 50 EMA, it will gain downiside momentum and head towards the support at 1.1695. A move below 1.1695 will push EUR/USD towards the test of the next support at 1.1630. #EUR/USD##FX#

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