EUR/USD Tests Resistance At 1.1270

U.S. Dollar Is Under Pressure Against Euro

EUR/USD is currently trying to settle back above the resistance at 1.1270 while U.S. dollar is under pressure against a broad basket of currencies.

The U.S. Dollar Index is currently testing the support level at 96.50. In case the U.S. Dollar Index manages to settle below this level, it will move towards the next support at 96.25 which will be bullish for EUR/USD.

Today, foreign exchange market traders will focus on the economic data from EU. Analysts expect that the final reading of Euro Area Manufacturing PMI report will indicate that Euro Area Manufacturing PMI increased from 58 in December to 59 in January. Euro Area Unemployment Rate is projected to decline from 7.2% in November to 7.1% in January.

In the U.S., Manufacturing PMI is projected to decline from 57.7 in December to 55 in January while ISM Manufacturing PMI is expected to decrease from 58.7 to 57.5.

It should be noted that U.S. dollar found itself under material pressure in recent trading sessions as Treasury yields pulled back from recent highs and traders decided to take some profits off the table after the major rally. In case Treasury yields start moving higher again, the American currency may get more support.

Technical Analysis

EUR/USD is currently testing the resistance level at 1.1270. In case this test is successful, EUR/USD will get to the test of the next resistance which is located at the 20 EMA at 1.1280.

If EUR/USD manages to settle above the 20 EMA, it will head towards the resistance at 1.1300. A move above this level will push EUR/USD towards the resistance at the 50 EMA at 1.1325.

On the support side, the previous resistance at 1.1230 will serve as the first support level for EUR/USD. If EUR/USD declines below this level, it will move towards the next support at 1.1200. A successful test of the support at 1.1200 will open the way to the test of the support at 1.1170.

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