EUR/USD Tests Support At 1.1010

Key Insights

• Euro continues to move lower in absence of any material breakthrough in Russia – Ukraine negotiations. 
• Traders will also focus on the Euro Area Retail Sales data.
• A move below 1.1010 will push EUR/USD towards the suport at 1.0990.

Euro Remains Under Serious Pressure

EUR/USD is currently trying to settle below the support at 1.1010, while the U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index is testing the resistance at the 98 level. If this test is successful, the U.S. Dollar Index will move towards the next resistance at 98.35, which will be bearish for EUR/USD.

Yesterday, EU reported that Euro Area Producer Prices increased by 5.2% month-over-month in January, compared to analyst consensus which called for growth of just 2.3%. On a year-over-year basis, Euro Area Producer Prices increased by 30.6%.

Today, foreign exchange market traders will have a chance to take a look at the Retail Sales data from EU. Analysts expect that Euro Area Retail Sales increased by 1.3% month-over-month in January. On a year-over-year basis, Euro Area Retail Sales are projected to grow by 9.1%.

It remains to be seen whether Euro Area Retail Sales data will have a material impact on the dynamics of the euro which is under serious pressure as the second round of negotiations between Russia and Ukraine did not lead to major improvements.

Technical Analysis

EUR/USD is testing the support at 1.1010. If this test is successful, EUR/USD will move towards the next support level at 1.0990.

In case EUR/USD manages to settle below 1.0990, it will move towards the next support level at 1.0950. A successful test of this level will open the way to the test of the support at 1.0925.

On the upside, the nearest resistance level for EUR/USD is located at 1.1040. In case EUR/USD gets back above this level, it will move towards the resistance at 1.1065. A move above 1.1065 will push EUR/USD towards the resistance at 1.1100.

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