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EUR/USD Daily Forecast – Support At 1.1720 Remains Strong

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Euro Tries To Gain Ground Against U.S. Dollar

EUR/USD continues its attempts to settle back above 1.1720 while the U.S. dollar is flat against a broad basket of currencies.

The U.S. Dollar Index is currently trying to settle below 93.20. A move below this level will open the way to the test of the support at 93.10 which will be bullish for EUR/USD.

Today, foreign exchange market traders will take a look at the flash reading of Euro Area Consumer Confidence report which is projected to show that Euro Area Consumer Confidence declined from -5.3 in August to -5.8 in September.

The main event of the day is the Fed Interest Rate Decision and the subsequent commentary from Fed Chair Jerome Powell. The key question is whether Fed is ready to announce the reduction of its asset purchase program.

At this point, it looks that recent problems with the spread of the Delta variant of coronavirus and worries about potential default of China’s Evergrande may provide Fed with an opportunity to delay tapering, which will be bearish for the American currency.

Technical Analysis

EUR/USD received support near 1.1720 and is trying to gain additional upside momentum. The next resistance level for EUR/USD is located at 1.1750.

If EUR/USD manages to settle above the resistance at 1.1750, it will move towards the next resistance which is located at the 20 EMA at 1.1775. A successful test of this level will push EUR/USD towards the resistance at the 50 EMA at 1.1800.

On the support side, EUR/USD needs to settle below the support at 1.1720 to have a chance to develop downside momentum in the near term. RSI remains in the moderate territory, and there is plenty of room to gain downside momentum in case the right catalysts emerge.

If EUR/USD settles below 1.1720, it will head towards the support at 1.1690. A move below this level will open the way to the test of the support at 1.1660. In case EUR/USD declines below 1.1660, it will head towards the support at 1.1630.

For a look at all of today’s economic events, check out our economic calendar.

This article was originally posted on FX Empire

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