EUR/USD Tests Resistance At 1.1370

Euro Is Mostly Flat Against U.S. Dollar

EUR/USD is currently trying to settle above the resistance at 1.1370 while U.S. dollar is mostly flat against a broad basket of currencies.

The U.S. Dollar Index has recently made an attempt to settle below 95.55 but failed to develop sufficient downside momentum and rebounded towards the 50 EMA at 95.65. In case the U.S. Dollar Index gets back above the 50 EMA, it will head towards the resistance at 95.75 which will be bearish for EUR/USD.

Today, foreign exchange market traders will take a look at Euro Area Industrial Production report. The report is expected to show that Euro Area Industrial Production increased by 0.5% month-over-month in November. On a year-over-year basis, Euro Area Industrial Production is projected to grow by 0.6%.

While Euro Area Industrial Production report may have some impact on EUR/USD dynamics, the main event of the day is the release of U.S. inflation reports.

Analysts expect that Inflation Rate increased by 7% year-over-year in December while Core Inflation Rate grew by 5.4%. In case U.S. inflation exceeds analyst expectations, U.S. dollar may get more support. Weaker-than-expected inflation figures will likely provide a material boost to EUR/USD.

Technical Analysis

EUR/USD has recently made another attempt to settle above the resistance at 1.1370 but failed to develop sufficient upside momentum and pulled back. In case EUR/USD manages to settle above 1.1370, it will head towards the next resistance level which is located at 1.1390.

A successful test of the resistance at 1.1390 will open the way to the test of the resistance at 1.1420. In case EUR/USD moves above 1.1420, it will head towards the resistance at 1.1460.

On the support side, the nearest support level for EUR/USD is located at the 50 EMA at 1.1355. If EUR/USD manages to settle back below the 50 EMA, it will move towards the support level which is located near the 20 EMA at 1.1330. A move below the 20 EMA will open the way to the test of the support at 1.1300.

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