EUR/USD Daily Forecast – U.S. Dollar Is Mostly Flat Against Euro
EUR/USD Stays Close To Support At 1.1775
EUR/USD continues to trade near the support level at 1.1775 while the U.S. dollar is mostly flat against a broad basket of currencies.
The U.S. Dollar Index has recently made an attempt to settle below the support level at 92.80 but this attempt yielded no results. In case the U.S. Dollar Index declines below this level, it will move towards the 20 EMA at 92.45 which will be bullish for EUR/USD.
The recent flash PMI reports from EU exceeded analyst expectations. Manufacturing PMI declined from 63.4 in June to 62.6 in July compared to analyst consensus of 62.5 while Services PMI improved from 58.3 to 60.4 compared to analyst consensus of 59.5.
However, these reports failed to provide material support to euro as foreign exchange market traders remained focused on the safe-haven role of the U.S. dollar.
Today, Treasury yields are moving lower as bond traders buy U.S. government bonds in order to increase their exposure to safe-haven assets. In this light, the American currency may also get some support from safe-haven buying during today’s trading session.
Technical Analysis
EUR/USD failed to gain additional downside momentum and is trading close to the support level at 1.1775. If EUR/USD settles below the support at 1.1775, it will move towards the next support level at 1.1750.
A successful test of the support at 1.1750 will be a worrisome development for EUR/USD bulls as it will indicate that EUR/USD tries to gain additional downside momentum. A move below 1.1750 will push EUR/USD towards the support at 1.1720. If EUR/USD manages to settle below this level, it will head towards the next support at 1.1690.
On the upside, EUR/USD needs to get above the resistance at 1.1800 to gain upside momentum in the near term. A move above this level will push EUR/USD towards the 20 EMA which is located at 1.1820.
If EUR/USD gets above the 20 EMA, it will get to the test of the next resistance at 1.1830. In case EUR/USD settles above 1.1830, it will head towards the resistance at 1.1860.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
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