EUR / USD Video 04.05.21.
US dollar strengthens against euro
EUR / USD is currently testing support at the 20-day EMA at 1.2025, while the US dollar is moving up against a broad basket of currencies.
The US dollar index is back above the 91 level and is testing resistance at the 20-day moving average at 91.30. If this test succeeds, the US Dollar Index will receive an additional upside momentum and head towards the resistance at 91.50, which will be bearish for EUR / USD.
The EU said yesterday that the eurozone manufacturing PMI rose from 62.5 in March to 62.9 in April, compared with an analyst consensus of 63.3. The US manufacturing PMI also came in slightly worse than expected, as the US manufacturing PMI rose from 59.1 to 60.5 from the analyst consensus of 60.6. While the reports fell short of analysts’ expectations, they highlighted the strength of the recovery in the manufacturing segment.
There are no major economic reports scheduled to be released in the EU today, so forex traders will focus on the dynamics of the US government bond markets. Treasury yields began to recover after yesterday’s pullback, and the continuation of this rebound may provide additional support for the US currency.
EUR / USD faced strong resistance at 1.2060 and pulled back. Currently, the EUR / USD pair is trying to consolidate below the 20-day moving average at 1.2025. If this attempt is successful, EUR / USD will move towards the 1.1990 support.
A successful test of support at 1.1990 will open the way for testing the next support level at 1.1965. If EUR / USD breaks below the 1.1965 support, it will head towards the next support at 1.1925.
On the other hand, EUR / USD needs to move back above the 20-day EMA in order to have a chance to develop upward momentum in the near future. The next resistance level is located at 1.2040.
If EUR / USD establishes above resistance at 1.2040, it will head towards resistance at 1.2060. A move above this level will open the way for a test of the resistance at 1.2090.
For all of today’s economic events, check out our economic calendar.