EUR/USD Tests The 1.1400 Level

U.S. Dollar Moves Higher Against Euro

EUR/USD is currently trying to settle below the 1.1400 level while U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index has recently made an attempt to settle above the resistance at the 50 EMA at 95.75 but failed to develop sufficient upside momentum and pulled back towards 95.65. The nearest support level for the U.S. Dollar Index is located at 95.40. In case the U.S. Dollar Index gets to the test of this level, EUR/USD will get more support.

Today, foreign exchange market traders will have a chance to take a look at trade balance figures from the U.S., but this report should not have a material impact on EUR/USD dynamics.

Instead, traders will focus on the dynamics of U.S. government bond markets as Treasury yields continue to move higher at a fast pace ahead of  U.S. inflation reports which will be released on Thursday.

Inflation data will serve as the main catalyst for the markets this week, and traders should expect volatility as markets prepare for the release of U.S. inflation reports.

Technical Analysis

EUR/USD is moving towards the nearest support level which is located at 1.1390. In case EUR/USD manages to settle below this level, it will head towards the next support level at 1.1370.

A move below the support at 1.1370 will open the way to the test of the support at the 50 EMA at 1.1345. The 20 EMA is located in the same area, and it looks that EUR/USD may get significant support in the 1.1340 – 1.1350 area.

On the upside, EUR/USD needs to settle back above 1.1400 to have a chance to gain upside momentum in the near term. The next resistance level for EUR/USD is located at 1.1420.

If EUR/USD climbs above 1.1420, it will head towards the resistance at 1.1450. A successful test of this level will push EUR/USD towards the resistance at 1.1465. In case EUR/USD gets above 1.1465, it will head towards the recent highs near 1.1485.

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