EUR/USD Tests Support At 1.0600

Key Insights

• EUR/USD continues to move lower as demand for the safe-haven U.S. dollar remains strong. 
• Today, traders will likely focus on the general market sentiment and comments from the ECB President Lagarde. 
• A successful test of the support at 1.0600 will push EUR/USD towards the support level at 1.0580.

Euro Remains Under Strong Pressure

EUR/USD is currently trying to settle below the support level at 1.0600, while the U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index has recently managed to get above the resistance level at 102.50 and tested the next resistance at 102.75. In case the U.S. Dollar Index settles above the resistance at 102.75, it will move towards the 103 level, which will be bearish for EUR/USD.

ECB President Lagarde is scheduled to speak today, and foreign exchange market traders will be focused on any potential changes in the ECB position. The European currency has been under strong pressure in recent trading sessions as traders rushed to buy the safe-haven U.S. dollar. The euro’s weakness is a favorable development for the European economy, so the ECB would have no intention to change the current trend.

Technical Analysis

EUR/USD is testing the support level at 1.0600. A successful test of the support level at 1.0600 will open the way to the test of the next support at 1.0580.

If EUR/USD declines below 1.0580, it will head towards the next support level, which is located at 1.0550. A move below this level will open the way to the test of the support at 1.0525.

On the upside, the nearest resistance level for EUR/USD is located at 1.0635. RSI is in the oversold territory, so the risks of a rebound are increasing. In case EUR/USD manages to settle back above the resistance at 1.0635, it will head towards the next resistance level at 1.0650. A move above this level will open the way to the test of the resistance at 1.0680.

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