EUR/USD Daily Forecast – Another Test Of Resistance At 1.1965

EUR/USD Video 01.12.20.

Euro Moves Higher Against U.S. Dollar

EUR/USD is trying to settle above the resistance at 1.1965 as the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index failed to settle above the 92 level and is currently trying to get back under the support at 91.75. If this attempt is successful, the U.S. Dollar Index will gain downside momentum and head towards the recent lows at 91.50 which will be bullish for EUR/USD.

Today, EUR/USD traders will focus on economic reports from the Euro Area. Inflation Rate is projected to decrease by 0.2% year-over-year in November while Core Inflation Rate is expected to grow by 0.2%.

EU will also provide the final reading of Manufacturing PMI for November which is expected to decline from 54.8 to 53.6. In the U.S., Manufacturing PMI is projected to grow from 53.4 in October to 56.7 in November.

In addition to economic data, foreign exchange market traders will wait for any additional news about Brexit negotiations. Time is running out for EU and UK to reach a compromise deal. The market believes that the deal would be reached, so a negative surprise on this front could lead to a major sell-off.

Technical Analysis

eur usd december 1 2020

EUR/USD managed to gain some upside momentum after yesterday’s pullback and is trying to get back above the resistance at 1.1965. If EUR/USD manages to get above this level, it will head towards the next resistance level at 1.2000.

This psychologically important level was tested during yesterday’s trading session, and EUR/USD faced strong resistance. While yesterday’s trading action was similar to the one that we’ve seen back in September, today’s strength of the euro shows that the pressure on the U.S. dollar is more significant than several months ago. Thus, EUR/USD has better chances to get above the resistance at 1.2000.

On the support side, the nearest material support level for EUR/USD is still located at 1.1910. In case EUR/USD declines below this level, it will head towards the next support at the 20 EMA at 1.1885.

For a look at all of today’s economic events, check out our economic calendar.