EUR/USD Tests Support At 1.1090

Key Insights

• U.S. dollar has started to rebound against a broad basket of currencies.
• Treasury yields are moving higher, which is bullish for the American currency.
• A move below 1.1090 will push EUR/USD towards the support level at 1.1060.

Euro Is Losing Ground Against U.S. Dollar

EUR/USD is currently trying to settle back below the support at 1.1090, 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 at 98 and is moving towards the next resistance level at 98.35. In case the U.S. Dollar Index gets to the test of this level, EUR/USD will find itself under more pressure.

Yesterday, EU reported that Euro Area Inflation Rate increased by 5.9% year-over-year in February, compared to analyst consensus of 5.8%.

Today, foreign exchange market traders will take a look at the Existing Home Sales report from the U.S., which is expected to show that Existing Home Sales declined by 5% month-over-month in February.

Traders will also continue to monitor the developments in U.S. government bond markets. Treasury yields have started to move higher after the recent pullback, which may provide more support to the American currency.

Technical Analysis

EUR/USD is testing the support level at 1.1090. If EUR/USD manages to settle below this level, it will move towards the next support level, which is located at the 20 EMA at 1.1060.

A move below the 20 EMA will lead to the test of the support at 1.1050. In case EUR/USD declines below this level, it will move towards the next support level at 1.1035.

On the upside, EUR/USD needs to get above 1.1090 to have a chance to gain upside momentum in the near term. The next resistance level for EUR/USD is located at 1.1120.

In case EUR/USD manages to settle above 1.1120, it will head towards the resistance at 1.1150. A successful test of this level will open the way to the test of the resistance at the 50 EMA at 1.1170.

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