EUR/USD Tests Support At 1.1100

Key Insights

• EUR/USD declines as demand for the safe-haven U.S. dollar stays strong. 
• Traders will focus on the inflation data from EU.
• A move below 1.1100 will push EUR/USD towards the support at 1.1065.

Euro Is Under Pressure Against U.S. Dollar

EUR/USD is currently trying to settle below 1.1100, while the U.S. dollar is moving higher against a broad basket of currencies.

The U.S. Dollar Index is currently testing the resistance at 97.50. If this test is successful, the U.S. Dollar Index will move towards the next resistance at 97.75, which will be bearish for EUR/USD.

Today, foreign exchange market traders will focus on the inflation data from EU. Analysts expect that Euro Area Inflation Rate increased by 0.4% month-over-month in February. On a year-over-year basis, Euro Area Inflation Rate is expected to increase by 5.4%. Euro Area Core Inflation Rate is expected to grow by 2.5% year-over-year.

It remains to be seen whether these reports will have a significant impact on currency dynamics as the recent developments in energy markets will surely boost inflation in the upcoming months. In this light, geopolitical developments and any news about negotiations between Russia and Ukraine will serve as the key drivers for EUR/USD.

Technical Analysis

 

EUR/USD is testing the support at 1.1100. If this test is successful, EUR/USD will move towards the next support level, which is located at 1.1065.

A move below the support at 1.1065 will open the way to the test of the support level at 1.1040. In case EUR/USD declines below this level, it will move towards the support at 1.1010.

On the upside, a move above 1.1100 will push EUR/USD towards the resistance at 1.1130. If EUR/USD gets above this level, it will head towards the resistance at 1.1170. A successful test of the resistance at 1.1170 will open the way to the test of the resistance at 1.1200.

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