EUR/USD Daily Forecast – Support At 1.1580 In Sight

Euro Is Losing Ground Against U.S. Dollar

EUR/USD is currently trying to settle below 1.1600 while the U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index has recently managed to move closer to the resistance at the 94 level. If the U.S. Dollar Index gets above this level, it will continue its rebound and head towards the resistance at 94.20 which will be bearish for EUR/USD.

There are no important economic reports scheduled to be released in the EU today so foreign exchange market traders will focus on the economic data from U.S.

U.S. Consumer Confidence report is projected to show that Consumer Confidence declined from 109.3 in September to 108.3 in October. New Home Sales are projected to grow by 1% month-over-month in September.

Traders will also continue to prepare for the ECB Interest Rate Decision which will be released on Thursday. The rate is expected to stay unchanged, so traders will focus on ECB commentary. At this point, it looks that ECB will be more dovish than Fed at the end of this year, which is bearish for euro.

Technical Analysis

EUR/USD managed to get below the support level at 1.1610 and is moving towards the next support level at 1.1580. RSI is in the moderate territory, and there is plenty of room to gain additional downside momentum in case the right catalysts emerge.

In case EUR/USD declines below the support at 1.1580, it will move towards the next support level at 1.1560. A successful test of this level will open the way to the test of the support at 1.1540.

On the upside, the previous support level at 1.1610 will serve as the first resistance level for EUR/USD. A move above this level will lead to the test of the resistance at the 20 EMA at 1.1620.

If EUR/USD gets above the 20 EMA, it will get to the test of the next resistance at 1.1630. In case EUR/USD manages to settle above 1.1630, it will head towards the resistance level which is located near the recent highs at 1.1660.

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