EUR/USD Daily Forecast – Test Of Resistance At 1.1230

Euro Tries To Rebound Against U.S. Dollar

EUR/USD is currently trying to settle above the resistance level at 1.1230 while the U.S. dollar is under pressure against a broad basket of currencies.

The U.S. Dollar Index is moving towards the support level at 96.50. A move below this level will open the way to the test of the next support at 96.25 which will be bullish for EUR/USD.

Today, foreign exchange market traders will stay focused on the news about a new variant of coronavirus which has emerged in South Africa. Concerns about this new variant have already put significant pressure on the world markets. European markets are down by more than 3%, while S&P 500 futures are down by more than 1.5%.

The rush to safety pushed Treasury yields lower, which was bearish for the American currency. Traders have recently started to bet that the Fed will cut its asset purchase program faster than previously expected, but the new variant of coronavirus may force the Fed to be more cautious.

Technical Analysis

EUR/USD failed to settle below the support level at 1.1200 and rebounded towards the resistance level at 1.1230. Currently, EUR/USD is trying to settle above this level. RSI remains in the oversold territory, and there is plenty of room to gain additional upside momentum in case the right catalysts emerge.

In case EUR/USD manages to settle above the resistance at 1.1230, it will move towards the next resistance level at 1.1270. A successful test of this level will open the way to the test of the resistance at 1.1300. If EUR/USD gets back above 1.1300, it will head towards the resistance level at 1.1325.

On the support side, EUR/USD needs to settle below the support at 1.1200 to have a chance to develop additional downside momentum. A move below 1.1200 will push EUR/USD towards the support at 1.1170. In case EUR/USD manages to settle below this level, it will head towards the support level which is located at 1.1150.

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