EUR/USD Daily Forecast – Euro Tries To Develop Upside Momentum
EUR/USD Video 13.08.20.
Falling Bond Yields And Stimulus Uncertainty Put Pressure On The U.S. Dollar
EUR/USD is trying to settle above the nearest resistance level at 1.1800 as the U.S. dollar continues to lose ground against a broad basket of currencies amid U.S. stimulus uncertainty and falling U.S. government bond yields.
The U.S. Dollar Index has recently managed to get below 93.20 and is trying to get to the test of the 93 level. In case the U.S. Dollar Index manages to settle below 93, EUR/USD will gain additional upside momentum.
The main problem for the U.S. dollar right now is the complete uncertainty regarding the fate of the new U.S. coronavirus aid package. Negotiations between Democrats and Republicans have stalled and it is not clear whether they will be restarted this week.
On top of that, the U.S. government bond yields have started to pull back after the recent upside move, putting additional pressure on the American currency.
In Europe, Germany has recently provided inflation numbers for July. Germany’s Inflation Rate was -0.1% on a year-over-year basis and -0.5% on a month-over-month basis.
The inflation report was fully in line with the analyst consensus. Germany’s inflation numbers contrast with U.S. inflation numbers which were reported yesterday. In the U.S., Inflation Rate was 1% on a year-over-year basis while Core Inflation Rate was 1.6%.
Technical Analysis
EUR/USD managed to get above the nearest resistance level at 1.1800 and is trying to gain more upside momentum.
RSI is in the moderate territory so EUR/USD has decent chances to develop momentum in case the U.S. dollar continues to show weakness against a broad basket of currencies.
The nearest resistance level for EUR/USD is located at 1.1880. In case EUR/USD settles above this level, it will head towards the next resistance at 1.1910.
On the support side, the previous resistance level at 1.1800 will likely serve as the first support level for EUR/USD. A move below this level will open the way to the test of the major support level at the 20 EMA at 1.1725.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
