EUR/USD Forecast: Bullish levels to watch after devastating US data downs the dollar


  • EUR/USD has advanced after weak US GDP and jobless claims. 
  • The Fed's gloomy stance and Europe's coronavirus advantage may extend the pair's gains.
  • Thursday's four-hour chart is showing that bulls have room to run.

Better than expected but still the worst in history – the US economy fell by 32.9% annualized in the second quarter, better than -34.1% estimated but well within the wide range of expectations. 

In quarterly terms, the world's largest economy squeezed by 9.5% – and that is better than Germany's contraction of 10.1% recorded early in the day. Nevertheless, EUR/USD is rising.

Investors seem to look beyond the second quarter – which ended a month ago – and focus on recent data. Europe is suffering several COVID-19 flareups but is returning to growth. That cannot be said about the US, where weekly jobless claims increased once again.

Initial applications rose to 1.434 million and continuing claims are up above 17 million – in the week when Non-Farm Payrolls surveys are held. Even if America gains jobs in July, the prospects are dim as the death toll from the disease is rising. 

For the full explanation: US GDP Quick Analysis: Could have been worse, but will not improve, winners and losers in markets

EUR/USD has already topped the post-Fed high of 1.1806 and may be ready to extend its gains. New coronavirus figures from the US may weigh heavily on the dollar later in the day.

EUR/USD Technical Analysis

Despite the recent rally, the Relative Strength Index on the four-hour chart remains below the 70 level – outside overbought conditions and allowing the currency pair to continue rising. 

The next level to watch is 1.1820 – a high point in September 2018. Beyond that point, euro/dollar would hit the highest since June 2018 – a two-year peak. The next hurdles are 1.1850 and then only the psychologically significant 1.20 – but that would trigger overbought conditions if it happens too fast.

Momentum remains to the upside and EUR/USD holds above the 50, 100, and 200 Simple Moving Averages. 

Support awaits at 1.1780, 1.1750, and 1.17. 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Analysis feed

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!

Latest Analysis


Latest Forex Analysis

Editors’ Picks

AUD/USD weaker ahead of RBA’s monetary policy decision

The Aussie is weak, despite receding dollar’s demand and the robust performance of US indexes. Coronavirus developments hit the commodity-linked currency ahead of the RBA.

AUD/USD News

Gold: This just might be as good as it gets for gold

The price of gold is trading at $1,975 within a range of between $1,960.54 and $1,986.76 at the time of writing, virtually flat on the day in consolidation having eeked out a fresh all-time high.

Gold News

USD/JPY struggling to retain the 106.00 level

The USD/JPY pair traded as high as 106.46 on Monday but struggles to retain gains above the 106.00 level amid lack of dollar’s demand.

USD/JPY News

Ethereum on its way to regaining $400 while BNB hit a new high at $22.5

BTC/USD is more stable than other coins right now but has been able to recover from its crash towards $10,500. It is currently trading at $11,369 and faces very little resistance until $14,000.

Read more

WTI drops below $40 on demand worries, OPEC+ output increase

Crude oil prices posted losses last week and seem to be struggling to shake off the bearish pressure on Monday. As of writing, the barrel of West Texas Intermediate (WTI) was trading at $39.85, losing 1.5% on a daily basis.

Oil News

Forex Majors

Cryptocurrencies

Signatures