EUR/USD Tests Support At 1.1050

Key Insights

• EUR/USD lacks momentum at the start of the week. 
• ECB President Lagarde comments may have a material impact on currency dynamics. 
• A move below 1.1050 will push EUR/USD towards the support at 1.1035.

Euro Is Mostly Flat Against U.S. Dollar

EUR/USD is currently trying to settle below the support at 1.1050, while the U.S. dollar is gaining some ground against a broad basket of currencies.

The U.S. Dollar Index has recently made an attempt to settle above the resistance at 98.35 but failed to develop sufficient upside momentum and pulled back towards 98.25. In case the U.S. Dollar Index manages to settle above 98.35, it will head towards the resistance level at 98.70, which will be bearish for EUR/USD.

Today, foreign exchange market traders will likely focus on the ECB President Lagarde speech. The market will be sensitive to any comments on the inflation. The recent data indicates that inflation remains a serious problem, while the developments in commodity markets should push prices even higher.

Technical Analysis

EUR/USD is testing the support level at 1.1050. In case EUR/USD manages to settle below this level, it will move towards the next support at 1.1035. A successful test of the support at 1.1035 will open the way to the test of the next support level, which is located at 1.1000.

If EUR/USD declines below the support at 1.1000, it will head towards the next support level at 1.0960. A move below this level will push EUR/USD towards the support at 1.0930.

On the upside, a move above 1.1050 will lead to the test of the resistance at the 20 EMA at 1.1060. In case EUR/USD manages to settle above the 20 EMA, it will head towards the resistance at 1.1090.

A move above the resistance at 1.1090 will push EUR/USD towards the resistance at 1.1120. In case EUR/USD settles above this level, it will head towards the resistance at 1.1150.

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