EUR/USD Moves Lower As Demand For Riskier Assets Declines

Key Insights

• The safe-haven U.S. dollar remains in demand. 
• On the economic front, traders will focus on the data from EU. 
• A move below 1.1100 will push EUR/USD towards the support at 1.1065.

Euro Is Moving Lower Against U.S. Dollar

EUR/USD continues its attempts to settle below the support at 1.1100, while the U.S. dollar is moving higher against a broad basket of currencies.

The U.S. Dollar Index is testing the resistance level at 97.50. If the U.S. Dollar Index settles above this level, it will move towards the next resistance at 97.75, which will be bearish for EUR/USD.

Yesterday, EU reported that Euro Area Inflation Rate increased by 0.9% month-over-month in February, compared to analyst consensus of 0.4%. On a year-over-year basis, Euro Area Inflation Rate increased by 5.8%, while analysts expected that it would grow by 5.4%. Euro Area Core Inflation Rate grew by 2.7%.

Today, foreign exchange market traders will focus on the final reading of the Euro Area Services PMI report, Euro Area Unemployment Rate report and Euro Area Producer Prices data for January.

Analysts expect that Euro Area Services PMI increased from 51.1 in January to 55.8 in February. Unemployment Rate is expected to decline from 7% in December to 6.9% in January. Producer Prices are expected to increase by 2.3% month-over-month in January. On a year-over-year basis, Producer Prices are projected to grow by 27%.

Technical Analysis

EUR/USD remains stuck near the support level at 1.1100. If EUR/USD moves below this level, it will head towards the next support at 1.1065.

A successful test of the support at 1.1065 will push EUR/USD towards the support at 1.1040. In case EUR/USD manages to settle below this level, it will head towards the next support level at 1.1010.

On the upside, EUR/USD needs to settle above 1.1100 to have a chance to develop upside momentum in the near term. The next resistance level is located at 1.1130.

If EUR/USD moves above 1.1130, it will head towards the next resistance level at 1.1170. A move above this level will push EUR/USD towards the resistance at 1.1200.

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