U.S. Dollar Continues To Gain Ground Against Euro
EUR/USD is currently trying to settle below the support at 1.1775 while the U.S. dollar is moving higher against a broad basket of currencies.
The U.S. Dollar Index is currently trying to get above the 93 level. A move above this level will open the way to the test of the resistance at 93.10 which will be bearish for EUR/USD.
Germany has recently reported that Producer Prices increased by 1.1% month-over-month in June. On a year-over-year basis, Producer Prices grew by 8.4%. While Producer Prices in Europe’s leading economy continue to move higher, the European Central Bank will likely reiterate its dovish message when it announces its Interest Rate Decision on July 22.
In fact, the ECB may even promise to provide support for longer than previously expected as Euro Area Inflation Rate remains below the 2% level. In addition, the threat of new coronavirus-related restrictions may also push ECB to deliver dovish commentary which may put more pressure on the euro on the foreign exchange market.
EUR/USD is currently testing the nearest support level which is located at 1.1775. This support level has been tested during yesterday’s trading session and proved its strength.
In case EUR/USD manages to settle 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 open the way to the test of the next support at 1.1720. If EUR/USD declines below the support at 1.1720, it will head towards the support at 1.1690.
On the upside, the nearest resistance level for EUR/USD is located at 1.1800. If EUR/USD manages to settle above the resistance at 1.1800, it will move towards the next resistance near yesterday’s highs at 1.1830.
A successful test of the resistance at 1.1830 will push EUR/USD towards the next resistance level which is located at the 20 EMA at 1.1850. A move above the 20 EMA will signal that EUR/USD will try to gain additional upside momentum.
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