EUR/USD Is Losing Ground Ahead Of Inflation Data

Key Insights

• Traders will focus on Euro Area inflation reports. 
• Non Farm Payrolls report from the U.S. will also have a significant impact on EUR/USD. 
• A move below the support at 1.1050 will push EUR/USD towards the next support level at 1.1035.

Euro Is Under Pressure Against U.S. Dollar

EUR/USD is currently trying to settle below the support at the 20 EMA at 1.1050, while the U.S. dollar is moving higher against a broad basket of currencies.

The U.S. Dollar Index has recently managed to get above 98.50 and is moving towards the resistance level at 98.70. In case the U.S. Dollar Index gets to the test of this level, EUR/USD will find itself under more pressure.

Today, foreign exchange market traders will focus on the flash reading of inflation reports from the EU. Analysts expect that Euro Area Inflation Rate increased by 1.9% month-over-month in March. On a year-over-year basis, Euro Area Inflation Rate is expected to grow by 6.6%. Euro Area Core Inflation Rate is projected to increase by 3.1% year-over-year.

In the U.S., the main event of the day is the release of Non Farm Payrolls report, which is expected to show that the American economy added 490,000 jobs in March. Meanwhile, Unemployment Rate is expected to decrease from 3.8% in February to 3.7% in March.

Technical Analysis

EUR/USD is testing the support level at 1.1050. If this test is successful, EUR/USD will move towards the next support, which is located at 1.1035.

A move below the support level at 1.1035 will open the way to the test of the support at 1.1010. In case EUR/USD declines below this level, it will head towards the support level at 1.0990.

On the upside, EUR/USD needs to stay above 1.1050 to have a chance to develop upside momentum in the near term. The next resistance level for EUR/USD is located at 1.1075.

In case EUR/USD manages to settle back above this level, it will move towards the next resistance at 1.1110. A successful test of this level will lead to the test of the resistance at the 20 EMA at 1.1120.

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