EUR/USD Tests Multi-Week Lows Ahead Of Producer Prices Data

Key Insights

• EUR/USD remains under strong pressure amid worries about the health of the European economy. 
• Today, traders will focus on the Producer Prices data from the EU, which is expected to show that prices are rising fast. 
• A move below the support at 1.0885 will push EUR/USD towards the next support level at 1.0865.

Euro Is Moving Lower Against U.S. Dollar

EUR/USD is currently trying to settle below the support level at 1.0885, while the U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index gained strong upside momentum in recent trading sessions and is testing the resistance level at 99.75. RSI remains in the moderate territory, so there is plenty of room to gain additional momentum in case the right catalysts emerge. A move above the resistance at 99.75 will push the U.S. Dollar Index towards the resistance at 100, which will be bearish for EUR/USD.

Today, foreign exchange market traders will focus on the Producer Prices reports from the EU. Analysts expect that Euro Area Producer Prices increased by 1.3% month-over-month in February. On a year-over-year basis, Euro Area Producer Prices are expected to grow by as much as 31.5%.

Technical Analysis

EUR/USD is testing the support level at 1.0885. In case this test is successful, EUR/USD will move towards the next support level, which is located at 1.0865.

A move below the support at 1.0865 will open the way to the test of the support at 1.0850. In case EUR/USD declines below 1.0850, it will head towards the support near March lows at 1.0810.

On the upside, the previous support level at 1.0900 will serve as the first resistance level for EUR/USD. In case EUR/USD manages to settle back above this level, it will head towards the next resistance at 1.0930. A move above the resistance at 1.0930 will push EUR/USD towards the resistance at 1.0950.

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