DAILY NOTION - FXEMPIRE - EUR/USD Forecast - Dec 08, 2020

EUR/USD has managed to stay above the nearest support level at 1.2090 while the U.S. dollar is gaining some ground against a broad basket of currencies.

The U.S. Dollar Index is currently trying to get to the test of the nearest resistance level at 91. A move above 91 will push the U.S. Dollar Index towards the next significant resistance at 91.50 which will be bearish for EUR/USD.

Today, foreign exchange market traders will focus on the economic data from EU. The third estimate of Euro Area GDP Growth Rate is expected to show that GDP grew by 12.6% quarter-over–quarter. On a year-over-year basis, GDP is projected to decline by 4.4%.

Meanwhile, the final reading of the third-quarter Euro Area Employment Change report is expected to show that employment increased by 0.9% quarter-over-quarter.

Traders will surely pay attention to ZEW Economic Sentiment Index report for December. Economic Sentiment is expected to decline from 32.8 in November to 32 in December as the second wave of the virus continues to put serious pressure on the European economy.

In addition to economic reports, EUR/USD traders will also wait for any Brexit news. Negotiations have stalled, and the risks of a no-deal Brexit are increasing. If Britain leaves EU without a deal, EUR/USD will likely find itself under pressure.

What's next?

Yesterday, EUR/USD tested the nearest support level at 1.2090 but did not manage to gain sufficient downside momentum. If EUR/USD manages to settle below this level, it will head towards the next support at the 20 EMA at 1.2000.

There are no important levels between 1.2090 and 1.2000 so this move may be fast. In case EUR/USD declines below the support at 1.2000, it will gain additional downside momentum and move towards the next support level at 1.1965.

On the upside, the nearest resistance level for EUR/USD is located at 1.2155. This resistance level was tested yesterday and proved its strength. A move above the resistance at 1.2155 will push EUR/USD towards the next resistance at the recent highs at 1.2175.

Original analysis: https://www.fxempire.com/forec...