EUR/USD Tests Support At 1.1230

Key Insights

• U.S. dollar rallies amid war in Ukraine
• EUR/USD will move towards 1.1200 if it manages to settle below the support level at 1.1230.
• Markets will focus on geopolitical developments and ignore economic reports 

EUR/USD is currently trying to settle below the support level at 1.1230, while the U.S. dollar is moving higher against a broad basket of currencies.

The U.S. Dollar Index is testing the resistance level at 96.70 as traders buy safe-haven assets due to war in Ukraine. If the U.S. Dollar Index gets above 96.70, it will move towards the resistance at 97, which will be bearish for EUR/USD.

Today, foreign exchange market traders will focus on the news from Ukraine. They will also pay attention to the sanctions that will be imposed on Russia, and their potential consequences for global markets.

Currently, traders rush to the safety of the U.S. dollar and the U.S. government bonds. Traders should keep in the mind that recent hawkish comments from central banks may be backtracked if financial authorities decide to provide additional support to markets at the time of increased uncertainty.

Today, U.S. will release the second estimate of the fourth-quarter GDP Growth Rate report, Initial Jobless Claims, Continuing Jobless Claims, and New Home Sales reports. However, it remains to be seen whether these reports will have any impact on currency dynamics as the whole world is focused on the war in Ukraine.

Technical Analysis

EUR/USD is testing the support level at 1.1230. If this test is successful, EUR/USD will move towards the next support at 1.1200. A move below this level will open the way to the test of the support at 1.1170.

In case EUR/USD manages to settle below the support at 1.1170, it will continue its downside move, and head towards the next support level at 1.1130.

On the upside, the previous support level at 1.1270 will serve as the first resistance level for EUR/USD. If EUR/USD gets above this level, it will head towards the next resistance at 1.1285.

A move above 1.1285 will push EUR/USD towards the resistance at 1.1300. In case EUR/USD manages to settle above this level, it will head towards the resistance at the 20 EMA at 1.1330.

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