EUR/USD Tests Resistance At 1.1170

Euro Moves Higher Against U.S. Dollar

EUR/USD is currently trying to settle back above 1.1170 while U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index is slowly moving towards the support level at 97. In case the U.S. Dollar Index manages to settle below this level, it will gain additional downside momentum and head towards the support at 96.70 which will be bullish for EUR/USD.

It should be noted that the U.S. Dollar Index rallied from the 95 level to the 97 level without any material pullback, so some traders may prefer to take profits off the table. However, it should be noted that RSI for the U.S. Dollar Index remains in the moderate territory, so there is enough room to gain additional upside momentum in case the right catalysts emerge.

Today, foreign exchange market traders will focus on the fourth-quarter Euro Area GDP Growth Rate report. Analysts expect that Euro Area GDP increased by 0.3% quarter-over-quarter. On a year-over-year basis, Euro Area GDP is projected to increase by 4.7%.

Technical Analysis

EUR/USD managed to get above the resistance at 1.1150 and is trying to get above the next resistance level at 1.1170. In case EUR/USD manages to settle back above 1.1170, it will gain additional upside momentum and move towards the resistance at 1.1200.

A successful test of the resistance at 1.1200 will push EUR/USD towards the resistance at 1.1230. If EUR/USD moves above this level, it will head towards the resistance at the 20 EMA at 1.1270.

On the support side, EUR/USD needs to get back below 1.1150 to have a chance to gain downside momentum in the near term. A move below 1.1150 will push EUR/USD towards the support at 1.1120.

In case EUR/USD declines below 1.1120, it will head towards the next support level at 1.1100. A successful test of the support level at 1.1100 will open the way to the test of the next support which is located at 1.1060.

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