EUR/USD Daily Forecast – Test Of Support At 1.1630

EUR/USD Video 02.11.20.

Euro Remains Under Pressure At The Start Of The Week

EUR/USD is trying to settle below the nearest support level at 1.1630 as the U.S. dollar continues to gain ground against a broad basket of currencies.

The U.S. Dollar Index has managed to get above the resistance at 94 and continues its upside move. In case the U.S. Dollar Index manages to settle above the nearest resistance at 94.20, it will gain more upside momentum which will be bearish for EUR/USD.

On Friday, EU reported that Euro Area third-quarter GDP Growth Rate was 12.7% quarter-over-quarter compared to analyst consensus which called for growth of 9.4%. On a year-over-year basis, GDP declined by 4.3%. Unemployment Rate was 8.3% in September, in line with the analyst consensus. Inflation Rate increased by 0.2% month-over-month in October.

The Euro Area economic reports were a bit better than expected but new lockdowns in Europe will likely put material pressure on growth in the Euro Area in the fourth quarter.

Today, traders will also have a chance to take a look at the final reading of Euro Area Manufacturing PMI report for October. Analysts expect that Manufacturing PMI will increase from 53.7 in September to 54.4 in October.

Technical Analysis

EUR/USD gained strong downside momentum and is trying to sette below the support at 1.1630. If this attempt is successful, EUR/USD will move towards the next support level at 1.1580.

A successful test of the support at 1.1580 will open the way to the next support level at 1.1540. In case EUR/USD declines below the support at 1.1540, it will head towards the support at 1.1500.

As I mentioned in previous articles on EUR/USD, the support levels between 1.1500 and 1.1630 are not strong so EUR/USD will have a good chance to develop additional downside momentum if it settles below 1.1630.

On the upside, the nearest resistance for EUR/USD is located at 1.1695. A move above this resistance level will push EUR/USD towards the next resistance at 1.1720. If EUR/USD settles above 1.1720, it will head towards the resistance at the 20 EMA at 1.1740.

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