According to the latest news, EUR/USD is trying to get back above the resistance at 1.2130, while the United States dollar is losing ground versus a basket of other currencies.
The greenback index fell below the support at the 20 EMA at 90.35. The American currency is slowly moving towards the 90 level. Significantly, if the dollar index gets to the test of this level, EUR/USD will get additional support.
Furthermore, the European Union announced that the Euro Area Inflation Rate fell by 0.3% year-over-year in December. Meanwhile, Core Inflation Rate boosted by 0.2%.
Additionally, prices remain weak in the Euro Area due to the negative impact of the decisive second wave of COVID-19 epidemic. It seems like Europe’s considerable difficulties on the virus front put some pressure on the euro in the last weeks.
Furthermore, foreign exchange market traders will concentrate on the European Central Bank Interest Rate Decision and the subsequent commentary. The rate is likely to stay intact, and traders will pay attention to ECB evaluation of the current economic condition.
EUR/USD is attempting to settle at 1.2130
On December 20, EUR/USD attempted to settle above the resistance at 1.2155 but could not to develop enough upside momentum and pulled back. Still, EUR/USD received strong support near 1.2080 and is attempting to settle back above the resistance at 1.2130.
If this effort is successful, EUR/USD will get to another test of the next resistance level, placed at the 20 EMA at 1.2155. An increase above this level will open the way to the test of the resistance at 1.2175. Furthermore, if EUR/USD settles above 1.2175, it will head towards the next resistance at 1.2220.
On the support side, the nearest material support level for EUR/USD is placed at the 50 EMA at 1.2115. If EUR/USD succeeds to settle below this level, it will head towards the next support at 1.2080. A triumphant test of this level will shift EUR/USD towards the next support level, placed at 1.2060.