Euro tries to gain further upward momentum
EUR / USD is slowly heading towards the next resistance level at 1.1880 as the US Dollar loses ground against a large basket of currencies.
The US dollar index is currently testing the closest support level at 92.50. If this test is successful, the US dollar index will gain additional bearish momentum which will be bullish for EUR / USD.
Yesterday, the United States reported that the NY Empire State Manufacturing Index fell from 10.50 in September to 6.30 in October. Today, forex traders will focus on US retail sales data for October.
Analysts expect retail sales to grow 0.5% month over month. Year over year, retail sales are expected to increase 5.7%. Retail sales data will show whether consumer activity has remained strong despite the recent coronavirus outbreak and could have a big impact on the currency market.
In addition to the retail sales report, the United States will provide industrial and manufacturing production reports for October. Industrial production and manufacturing output are expected to increase by 1% on a monthly basis.
EUR / USD has managed to settle above resistance at 1.1830 and is heading towards the next resistance level at 1.1880. Volatility has subsided in recent trading sessions, but the situation could change quickly if the US dollar index moves below support at 92.50 and heads to the recent lows at 92.10.
In the event that EUR / USD manages to stabilize above resistance at 1.1880, it will head to test the major resistance level at November highs at 1.1910. A move above this level will push EUR / USD towards the next resistance at 1.1965.
On the support side, the closest support level for EUR / USD is at 1.1830. This level of support was tested in the previous trading session and has proven its strength.
A move below support at 1.1830 will pave the way for testing the next level of support at 20 EMA at 1.1805. If the EUR / USD drops below the 20 EMA, it will head to the next support at the 50 EMA at 1.1780.
For an overview of all of today’s economic events, check out our economic calendar.