EUR/USD Moves Higher Ahead Of U.S. Retail Sales Data

U.S. Dollar Declines Against Euro

EUR/USD is currently trying to settle above the resistance at 1.1370 while U.S. dollar is under pressure against a broad basket of currencies.

The U.S. Dollar Index is currently trying to settle below the 20 EMA at 95.90. In case the U.S. Dollar Index manages to settle below this level, it will get to the test of the support level at the 50 EMA at 95.80 which will be bullish for EUR/USD.

Yesterday, EU reported that Euro Area ZEW Economic Sentiment Index declined from 49.4 in January to 48.6 in February compared to analyst consensus of 49.6.

Today, foreign exchange market traders will have a chance to take a look at Euro Area Industrial Production report. Analysts expect that Euro Area Industrial Production increased by 0.3% month-over-month in December. On a year-over-year basis, Euro Area Industrial Production is expected to decline by 0.5%.

In the U.S., traders will focus on the Retail Sales report for January. Analysts expect that Retail Sales increased by 2% on a month-over-month basis. Industrial Production is projected to increase by 0.4% month-over-month in January, while Manufacturing Production is expected to grow by 0.3%.

Technical Analysis

EUR/USD is currently testing the resistance level at 1.1370. In case this test is successful, EUR/USD will head towards the next resistance which is located at 1.1390. RSI is in the moderate territory, so there is plenty of room to gain additional upside momentum in case the right catalysts emerge.

If EUR/USD manages to settle above the resistance at 1.1390, it will move towards the next resistance level at 1.1420. A successful test of this level will open the way to the test of the resistance at 1.1450.

On the support side, the previous resistance level at the 50 EMA at 1.1350 will serve as the first support level for EUR/USD. It should be noted that the 20 EMA is located in the nearby, so EUR/USD will likely get material support near 1.1350.

A move below 1.1350 will push EUR/USD towards the support at 1.1330. In case EUR/USD declines below this level, it will head towards the next support level at 1.1300.

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