EUR/USD Daily Forecast – U.S. Dollar Is Losing Ground Against Euro

08 Oct 2020, 20:00 · Views 776

Euro Continues To Move Higher Against U.S. Dollar

EUR/USD managed to stay above the key support level at 1.1750 and continues its attempts to gain additional upside momentum as the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index is currently trying to settle below 93.50. If this attempt is successful, U.S. Dollar Index will have a chance to test the recent lows at 93.35. A move below this level will provide material support to EUR/USD.

Yesterday, the U.S. Fed released FOMC Minutes from the last meeting. FOMC Minutes indicated that the Fed had not yet decided whether it was appropriate to increase the size of asset purchases which remained the biggest tool in its toolbox.

In general, FOMC Minutes were mostly neutral for the U.S. dollar. Today, traders will focus on the upcoming U.S. Initial Jobless Claims and Continuing Jobless Claims reports and on the continued Brexit negotiations between EU and UK.

In recent days, markets were optimistic about the perspectives of the Brexit deal, although it remains to be seen whether negotiators will be able to get a compromise deal after months of political struggle.

Technical Analysis

EUR/USD is currently trying to gain more upside momentum above the significant support level at 1.1750. The nearest resistance level for EUR/USD is located at 1.1830, although the previous upside move was stopped a bit lower, at 1.1810.

EUR/USD will need to settle above 1.1800 to have a chance to get to the test of the resistance at 1.1830. A successful test of the resistance at 1.1830 will open the way to the next resistance level at 1.1910.

I’d expect plenty of interest at 1.1910 since previous moves above this level were very short-lived, and this level remains a key obstacle on the way up for EUR/USD. In case EUR/USD gets above this level, it will head towards the next resistance at 1.1965.

On the support side, EUR/USD is set to get strong support in the 1.1740 – 1.1750 area. A move below this support area will push EUR/USD towards the next support at 1.1695. #EUR/USD##FX#

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