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EUR/USD Daily Forecast – Support At 1.2080 Stays Strong

EUR/USD Video 19.01.21.

Euro Gains Ground Against U.S. Dollar

EUR/USD received support near 1.2080 and is trying to get back above 1.2100 while the U.S. dollar is under pressure against a broad basket of currencies.

The U.S. Dollar Index is currently testing the nearest support level at 90.70. If this test is successful, the U.S. Dollar Index will head towards the next support at 90.50 which will be bullish for EUR/USD.

Today, foreign exchange market traders will have a chance to take a look at Euro Area ZEW Economic Sentiment Index for January. Analysts forecast that ZEW Economic Sentiment Index will grow from 54.4 to 57. In Germany, which is the leading EU economy, ZEW Economic Sentiment Index is expected to increase from 55 to 60.

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The U.S. dollar managed to rebound from multi-month lows at the beginning of this year, but it remains to be seen whether the recent upside momentum will be sustainable. The 50 EMA will likely serve as a strong obstacle on the way up for the U.S. Dollar Index, and a move above this level will signal that the American currency is ready to continue its upside move which will be bearish for EUR/USD.

Technical Analysis

EUR/USD failed to settle below the support level at 1.2080 and is moving towards the nearest resistance level which is located at the 50 EMA at 1.2110. A move above the 50 EMA will signal that EUR/USD will try to develop additional upside momentum.

If EUR/USD settles above the 50 EMA, it will get to the test of the next resistance level at 1.2130. In case EUR/USD gets above the resistance at 1.2130, it will head towards the next resistance at 1.2155. The 20 EMA is located in the nearby so EUR/USD will likely face material resistance in this area.

On the support side, EUR/USD must settle below the support at 1.2080 to continue its downside move. A move below the support at 1.2080 will push EUR/USD towards the next support level at 1.2060. In case EUR/USD gets below this level, it will head towards the support at 1.2040.

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

This article was originally posted on FX Empire

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