EUR/USD Daily Forecast – Euro Lacks Momentum
EUR/USD Video 27.01.21.
Euro Is Mostly Flat Against U.S. Dollar
EUR/USD continues its attempts to settle above the 20 EMA at 1.2160 while the U.S. dollar is mostly flat against a broad basket of currencies.
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The U.S. Dollar Index has settled in the range between the support at the 90 level and the resistance at the 20 EMA at 90.30. If the U.S. Dollar Index gets back above the 20 EMA, it will gain some upside momentum and head towards the next resistance level at 90.50 which will be bearish for EUR/USD.
Today, foreign exchange market traders will focus on the U.S. Fed Interest Rate Decision and the latest developments in the U.S. stimulus story.
The Fed is expected to reiterate its dovish message but it remains to be seen whether the central bank’s comments will be dovish enough to push the U.S. dollar to new lows.
Meanwhile, Biden’s $1.9 trillion stimulus proposal is facing opposition from Republicans who want a more targeted bill. Democrats have signaled that they would try to pass the bill with a majority vote but it is not clear whether they will succeed without support from the other party.
Technical Analysis
EUR/USD is currently trying to settle above the 20 EMA at 1.2160. If this attempt is successful, EUR/USD will get to the test of the next resistance level at 1.2175. If EUR/USD gets above this level, it will head towards the next resistance at 1.2220. A successful test of the resistance at 1.2220 will open the way to the test of the resistance at 1.2250.
On the support side, the nearest support level for EUR/USD is located at the 50 EMA at 1.2125. EUR/USD has already made several attempts to settle below this level in recent trading sessions but these attempts yielded no results.
In case EUR/USD declines below the 50 EMA at 1.2125, it will gain downside momentum and head towards the next support level at 1.2080. A successful test of the support at 1.2080 will push EUR/USD towards the support at the recent lows at 1.2060.
For a look at all of today’s economic events, check out our economic calendar.