EUR/USD Is Back To The 1.1300 – 1.1330 Range

Euro Is Losing Ground Against U.S. Dollar

EUR/USD is currently trying to settle back below 1.1330 while U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index managed to get above the 20 EMA at 95.70 and is trying to gain additional upside momentum. In case this attempt is successful, the U.S. Dollar Index will move towards the 96 level which will be bearish for EUR/USD.

Today, EU will release flash readings of Euro Area PMI reports for January. Analysts expect that Euro Area Manufacturing PMI declined from 58 in December to 57.5 in January while Euro Area Services PMI decreased from 53.1 to 52.2.

Foreign exchange market traders will also keep an eye on general market sentiment ahead of Fed Interest Rate Decision, which will be released on Wednesday. Traders try to guess whether the Fed will be more even more hawkish and signal that it will raise rates at a very fast pace.

A hawkish Fed will provide more support to the American currency, but it remains to be seen whether Fed is ready to upset equity markets which have been under serious pressure in recent weeks.

Technical Analysis

EUR/USD is currently testing the support level at 1.1330. In case this test is successful, EUR/USD will move towards the next support level which is located at 1.1300.

A move below the support at 1.1300 will push EUR/USD towards the support level at 1.1270. If EUR/USD declines below this level, it will head towards the next support at 1.1230.

On the upside, the previous support level at 1.1330 will serve as the first resistance level for EUR/USD. If EUR/USD gets back above this level, it will move towards the resistance at the 20 EMA at 1.1350.

A successful test of the resistance at 1.1350 will push EUR/USD towards the resistance at the 50 EMA at 1.1360. If EUR/USD gets above 1.1360, it will head towards the next resistance at 1.1370.

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