EUR/USD Tests Support At 1.0865

Key Insights

• EUR/USD managed to move away from yesterday’s lows. 
• However, EUR/USD remains under some pressure amid uncertainty over the near-term fate of the European economy. 
• A move below 1.0865 will push EUR/USD towards the support level at 1.0840.

Traders Will Likely Ignore Economic Reports And Stay Focused On Geopolitical Developments

EUR/USD is currently trying to settle below the support at 1.0865, while the U.S. dollar is mostly flat against a broad basket of currencies.

The U.S. Dollar Index is testing the resistance level at 99.20. A successful test of this level will push the U.S. Dollar Index towards the next resistance at 99.45, which will be bearish for EUR/USD.

Today, foreign exchange market traders will have a chance to take a look at the third estimate of the fourth-quarter Euro Area GDP Growth Rate. The report is expected to show that Euro Area GDP increased by 0.3% on a quarter-over-quarter basis. The final reading of the fourth-quarter Euro Area Employment Change report is expected to indicate that employment improved by 0.5% on a quarter-over-quarter basis.

It remains to be seen whether these reports will have any impact on EUR/USD dynamics as the European economy is currently operating in a completely different environment.

Technical Analysis

EUR/USD continues its attempts to settle below the support level at 1.0865. In case EUR/USD manages to settle below this level, it will head towards the next support at 1.0840.

A move below the support at 1.0840 will push EUR/USD towards the support at 1.0820. If EUR/USD gets below this level, it will head towards the next support at 1.0800.

On the upside, the nearest resistance level for EUR/USD is located at 1.0885. RSI is in the oversold territory, so there is plenty of room to gain additional upside momentum in case the right catalysts emerge. If EUR/USD settles above 1.0885, it will head towards the resistance at 1.0900. A successful test of this level will push EUR/USD towards the resistance at 1.0930.

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