Euro Moves Lower Against U.S. Dollar At The Start Of The Week
EUR/USD is trying to settle below 1.2175 while the U.S. dollar is gaining ground against a broad basket of currencies.
The U.S. Dollar Index gained upside momentum on worries about new COVID-19 strain in Britain. Many European countries have already closed their borders for British travelers, boosting demand for the safe-haven U.S. dollar on the foreign exchange market.
As a result, the U.S. Dollar Index is trying to get above the resistance at 90.50. A move above this level will push the U.S. Dollar Index towards the next resistance level at the 20 EMA at 91 which will be bearish for EUR/USD.
Today, EU will release flash Consumer Confidence report for the Euro Area. Analysts expect that Consumer Confidence increased from -17.6 to -16.8 in December but remained under significant pressure from the second wave of the virus. The latest developments in Britain will likely put more pressure on Euro Area Consumer Confidence in the upcoming weeks.
Technical Analysis
EUR/USD is currently trying to get to get below the major support level at 1.2175. In case EUR/USD manages to settle below the support at 1.2175, it will move towards the next support level at 1.2155.
RSI is in the moderate territory so there is plenty of room to gain additional downside momentum in case the right catalysts emerge.
If EUR/USD declines below the support at 1.2155, it will head towards the support level at the 20 EMA at 1.2125. A successful test of this level will open the way to the test of the support at 1.2110.
On the upside, EUR/USD needs to get back above 1.2200 to have a chance to gain upside momentum. The next resistance level for EUR/USD is located at 1.2220. If EUR/USD settles above this level, it will gain upside momentum and head towards the next resistance at 1.2250. A move above this level will push EUR/USD towards the resistance level which is located just above recent highs at 1.2280.
