EUR/USD Moves Towards The Support At 1.1370

Euro Is Under Pressure Ahead Of The Weekend

EUR/USD is currently trying to settle below the support at 1.1370 while U.S. dollar is moving higher against a broad basket of currencies.

The U.S. Dollar Index has recently managed to get above the 96 level and is trying to develop additional upside momentum. In case the U.S. Dollar Index manages to settle above 96, it will move towards the next resistance level at 96.25 which will be bearish for EUR/USD.

Yesterday, higher-than-expected inflation data and hawkish comments from Fed’s Bullard provided support to the American currency. Meanwhile, the yield of 2-year Treasuries moved to the 1.60% level while the yield of 10-year Treasuries crossed the 2.00% mark.

Today, foreign exchange market traders will have a chance to take a look at the preliminary reading of Michigan Consumer Sentiment report for February. Analysts expect that Consumer Sentiment improved from 67.2 in January to 67.5 in February. It will be interesting to see whether high inflation put additional pressure on Consumer Sentiment.

Technical Analysis

EUR/USD is currently trying to get to the test of the support level at 1.1370. RSI remains in the moderate territory, and there is plenty of room to gain additional downside momentum in case the right catalysts emerge.

If EUR/USD declines below the support at 1.1370, it will head towards the next support level which is located at the 20 EMA at 1.1360. A move below the 20 EMA will lead to the test of the support at the 50 EMA at 1.1350. In case EUR/USD manages to settle below the 50 EMA, it will head towards the next support level at 1.1330.

On the upside, the previous support at 1.1390 will serve as the first resistance level for EUR/USD. In case EUR/USD gets back above this level, it will head towards the next resistance which is located at 1.1420. A move above this level will open the way to the test of the resistance at 1.1390.

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