EUR/USD Remains Stuck Near 1.1420

Euro Is Mostly Flat Against U.S. Dollar

EUR/USD is currently trying to get back above 1.1420 while U.S. dollar is losing some ground against a broad basket of currencies.

The U.S. Dollar Index failed to get to the test of the 50 EMA at 95.75 and pulled back towards 95.60. In case the U.S. Dollar Index declines below this level, it will head towards the support level at 95.40 which will be bullish for EUR/USD.

There are no significant economic reports scheduled to be published in the U.S. and EU today, so traders will continue to wait for the ultra-important U.S. inflation data which will be released tomorrow.

Analysts expect that U.S. Inflation Rate increased by 7.3% year-over-year in January, but markets fear that inflation may exceed these expectations. Treasury yields have rallied in recent days as bond traders prepared for the release of inflation reports, which was bullish for the U.S. dollar. Today, Treasury yields are moving lower, but it remains to be seen whether this pullback will be sustainable.

Technical Analysis

EUR/USD did not manage to get to the test of the support at 1.1390 and rebounded towards the 1.1420 level. In case EUR/USD manages to settle above this level, it will head towards the next support level which is located at 1.1450. RSI is in the moderate territory, and there is plenty of room to gain additional upside momentum in case the right catalysts emerge.

In case EUR/USD moves above 1.1450, it will head towards the resistance at 1.1465. A successful test of this level will open the way to the test of the resistance at the recent highs at 1.1485.

On the support side, the nearest support level for EUR/USD is located at 1.1390. If EUR/USD declines below this level, it will move towards the support at 1.1370. A successful test of this level will push EUR/USD towards the support which is located at the 20 EMA at 1.1355.

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