EUR/USD received support near 1.2220 and is trying to settle above the resistance at 1.2250
U.S. Dollar Is Losing Ground Against Euro At The Beginning Of The Week
EUR/USD is currently trying to settle above the resistance at 1.2250 while the U.S. dollar is losing ground against a broad basket of currencies.
The U.S. Dollar Index is moving towards recent lows at 89.55. If the U.S. Dollar Index manages to settle below the support at 89.55, it will gain additional downside momentum and head towards the next support level at 89.40 which will be bullish for EUR/USD.
Today, EU will provide the final reading of the Euro Area Manufacturing PMI report for December. Manufacturing PMI is expected to grow from 53.8 in November to 55.5 in December.
The U.S. dollar remains under pressure on the foreign exchange market as traders bet on a strong economic recovery and choose riskier currencies. The market expects that the unprecedented support provided by the world governments and central banks will be sufficient enough to support a robust recovery in 2021 which is bearish for the American currency.
EUR/USD has recently failed to settle below the support at 1.2220 and is trying to settle above the nearest resistance level at 1.2250. In case this attempt is successful, EUR/USD will move towards the next resistance level at 1.2280. RSI has recently declined back into the moderate territory so there is plenty of room to gain upside momentum.
If EUR/USD gets above the resistance at 1.2280, it will head towards the recent highs at 1.2310. A successful test of this level will push EUR/USD towards the next resistance at 1.2325.
On the support side, the nearest significant support level for EUR/USD is located at 1.2220. In case EUR/USD declines below this level, it will head towards the next support at the 20 EMA at 1.2195.
A move below the 20 EMA will present a material problem for euro bulls as it will signal that EUR/USD has lost its near-term upside momentum. In this case, EUR/USD will quickly get to the test of the next support at 1.2175.