EUR/USD is trying to get back above 1.1830 as the U.S. dollar is pulling back after yesterday’s upside move.
The U.S. Dollar Index, which measures the strength of the U.S. dollar against a broad basket of currencies, has declined below the 93 level and is trying to get to the test of the nearest support level at 92.80. A move below 92.80 will push the U.S. Dollar Index towards 92.50 which will be bullish for EUR/USD.
Today, EUR/USD traders will continue to follow the latest developments on the U.S. stimulus front. U.S Republicans and Democrats continue negotiations, but it remains to be seen whether they will be able to reach a compromise deal before the elections.
In addition, traders will continue to prepare for the European Central Bank (ECB) Interest Rate Decision which will be announced on Thursday. The rate is expected to stay unchanged at 0%, and the market will pay attention to the commentary from ECB.
EUR/USD failed to settle below 1.1800 and is trying to break through the nearest resistance level at 1.1830. If this is successful, EUR/USD will move towards the next resistance level at the recent highs at 1.1870.
A move above the resistance at 1.1870 will open the way to the test of the major resistance level at 1.1910. Most likely, EUR/USD will need strong catalysts to settle above the resistance at 1.1910.
On the support side, the nearest support level for EUR/USD is located at the 20-EMA at 1.1795. If EUR/USD manages to settle below this support level, it will gain additional downside momentum and decline towards the next support at the 50-EMA at 1.1770.
A move below the 50-EMA level will signal that EUR/USD has lost upside momentum. In this case, EUR/USD will head towards the major support level at 1.1750.