EUR/USD continues to gain ground and is trying to get to the test of the nearest resistance level at 1.1910.
Euro Continues Its Upside Move
EUR/USD is trying to get to the test of the nearest resistance level at 1.1910 as the U.S. dollar continues to lose ground against a broad basket of currencies.
Investor mood is lifted by positive economic data from China which provided support to riskier assets. China’s Industrial Production increased by 5.6% in August compared to analyst consensus which called for growth of 5.1%. Meanwhile, China’s Retail Sales have finally shown growth of 0.5% after remaining depressed in recent months.
The positive news from China may put more pressure on the American currency and push the U.S. Dollar Index closer to the next major support level at 92.50. If this happens, EUR/USD will have a good chance to settle above the nearest resistance level at 1.1910.
Today, the U.S. will provide Industrial Production and Manufacturing Production reports for August. Industrial Production is expected to grow by 1% on a month-over-month basis while Manufacturing Production is projected to increase by 1.2%. Any weakness in these reports may put additional pressure on the American currency.
In Euro Area, traders will focus on the upcoming release of ZEW Economic Sentiment Index for September. The key question is whether the previous upside trend of this index will continue despite the worsening situation on the coronavirus front in Europe.
EUR/USD continues to gain ground and looks ready to test the nearest resistance level at 1.1910. If this test is successful, EUR/USD will gain more upside momentum and head towards the next resistance at 1.1965.
A move above 1.1965 will provide EUR/USD with an opportunity to get to the test of the psychologically important resistance level at 1.2000.
On the support side, the nearest support level for EUR/USD is located at the 20 EMA at 1.1840. If EUR/USD gets below this support level, it will gain downside momentum and head towards the next major support level at 1.1765.
From a big picture point of view, EUR/USD remains in a strong upside trend. The recent attempt to settle below the 20 EMA did not yield any results, and EUR/USD quickly rebounded back above this important level. Currently, EUR/USD maintains solid chances to get to the test of September highs at 1.2000.