EUR/USD Tests Support At 1.0810

Key Insights

• EUR/USD remains under pressure as traders bet on the slowdown of the European economy. 
• Today, traders will focus on the Producer Prices data from the U.S. 
• A move below 1.0810 will push EUR/USD towards the support at 1.0780.

Euro Continues To Lose Ground Against U.S. Dollar

EUR/USD is currently trying to settle below the support level at 1.0810, while the U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index settled above 100.30 and is testing the next resistance level at 100.50. In case this test is successful, the U.S. Dollar Index will move towards the next resistance at 100.85, which will be bearish for EUR/USD.

Yesterday, EU released the Euro Area ZEW Economic Sentiment Index report, which indicated that Economic Sentiment declined from -38.7 in March to -43 in April, compared to analyst consensus of -28. This report highlighted the current problems in the European economy, which continue to put pressure on the euro.

Today, foreign exchange market traders will focus on Producer Prices data from the U.S. Analysts expect that Producer Prices increased by 1.1% month-over-month in March. On a year-over-year basis, Producer Prices are expected to grow by 10.6%. Core Producer Prices are expected to increase by 8.4% year-over-year in March.

Technical Analysis

EUR/USD is testing the support level at 1.0810. In case this test is successful, EUR/USD will move towards the next support level, which is located at 1.0780.

A successful test of the support at 1.0780 will open the way to the test of the next support at 1.0760. If EUR/USD declines below this level, it will move towards the support at 1.0730.

On the upside, the previous support at 1.0850 will serve as the first resistance level for EUR/USD. In case EUR/USD climbs back above this level, it will head towards the next resistance at 1.0865. A successful test of the resistance at 1.0865 will push EUR/USD towards the resistance at 1.0885.

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