EUR/USD Remains Under Pressure

Euro Declines Against U.S. Dollar

EUR/USD is currently trying to get below the support at 1.1300 while U.S. dollar is moving higher against a broad basket of currencies.

The U.S. Dollar Index is testing the resistance level at 96. A move above this level will push the U.S. Dollar Index towards the resistance at 96.25 which will be bearish for EUR/USD.

Today, foreign exchange market traders will have a chance to take a look at Ifo Business Climate report from Germany. Analysts expect that Ifo Business Climate was unchanged at 94.7 in January, but it remains to be seen whether the report will meet analyst expectations amid a strong coronavirus wave in Europe.

Traders will also keep an eye on the developments in U.S. government bond markets as the yield of 2-year Treasuries managed to get back above the 1.00% level after the recent pullback.

Treasury yields were moving lower in recent trading sessions due to high demand for safe-haven assets, but worries about inflation ahead of the Fed Interest Rate Decision may push yields higher, which will be bullish for the American currency.

Technical Analysis

EUR/USD remains stuck in the 1.1300 – 1.1330 range. In case EUR/USD manages to settle below the support at 1.1300, it will head towards the next support level which is located at 1.1270.

A move below 1.1270 will push EUR/USD towards the support at 1.1230. If EUR/USD declines below this level, it will gain additional downside momentum and head towards the support at 1.1200. In this scenario, EUR/USD will have a good chance to start a significant downside trend and get to the 1.1000 – 1.1100 range.

On the upside, the nearest resistance level for EUR/USD is located at 1.1330. In case EUR/USD gets back above this level, it will move towards the resistance at the 20 EMA at 1.1350. A move above the 20 EMA will lead to the test of the next resistance which is located at the 50 EMA at 1.1360.

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