EUR/USD Tests Support At 1.1400

Euro Is Losing Ground Against U.S. Dollar

EUR/USD is currently trying to settle below 1.1400 while U.S. dollar is moving higher against a broad basket of currencies.

The U.S. Dollar Index is trying to settle above the resistance level at 95.40. In case the U.S. Dollar Index manages to get above this level, it will move towards the next resistance at the 50 EMA at 95.55 which will be bearish for EUR/USD.

Today, foreign exchange market traders will focus on Euro Area ZEW Economic Sentiment Index for January. Analysts expect that Euro Area Economic Sentiment improved from 26.8 in December to 29.5 in January despite the spread of Omicron.

Traders will also stay focused on the trajectory of U.S. Treasury yields. Yields continue to move higher as traders bet that Fed will be forced to raise rates aggressively in order to put pressure on inflation.

The yield of 2-year Treasuries has settled above the 1.00% mark while the yield of 30-year Treasuries has moved above the 2.15% level. In case Treasury yields continue to move higher, the American currency may get more support.

Technical Analysis

EUR/USD is testing the support level at 1.1400. In case this test is successful, EUR/USD will move towards the next support level which is located at the 50 EMA at 1.1370.

A move below the 50 EMA at 1.1370 will open the way to the test of the support at 1.1350. If EUR/USD declines below this level, it will head towards the next support at 1.1330.

On the upside, the nearest resistance level for EUR/USD is located at 1.1420. This resistance level has been tested several times in recent trading sessions and proved its strength.

In case EUR/USD manages to settle back above the resistance at 1.1420, it will head towards the next resistance at 1.1460. A successful test of the resistance at 1.1460 will open the way to the test of the next resistance level at 1.1490.

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