Euro Gains Some Ground Against U.S. Dollar
EUR/USD is currently trying to settle above 1.1330 while U.S. dollar is moving lower against a broad basket of currencies.
The U.S. Dollar Index is trying to get below support level at the 50 EMA at 95.60. If this attempt is successful, it will move towards the next support at 95.40 which will be bullish for EUR/USD.
Yesterday, EU reported that Euro Area Inflation Rate increased by 0.4% month-over-month in December. On a year-over-year basis, Euro Area Inflation Rate grew by 5%. Euro Area Core Inflation Rate increased by 2.6% year-over-year. All reports were in line with the analyst consensus and had minimal impact on currency dynamics.
Today, foreign exchange market traders will focus on the flash reading of Euro Area Consumer Confidence report for January. Analysts expect that Euro Area Consumer Confidence declined from -8.3 in December to -9 in January.
Traders will also continue to monitor the developments in U.S. government bond markets. Treasury yields have pulled back from their recent highs, which may put more pressure on the U.S. dollar. However, it remains to be seen whether this pullback will be sustainable as markets remain worried about high inflation and upcoming rate hikes from the Fed.
EUR/USD is currently testing the resistance level at 1.1330. In case this test is successful, EUR/USD will move towards the next resistance which is located near the 20 EMA at 1.1350.
A move above the 20 EMA at 1.1350 will push EUR/USD towards the next resistance near at 1.1370. The 50 EMA is located in the nearby, so EUR/USD may face significant resistance in the 1.1350 – 1.1370 area. A move above this area will push EUR/USD towards the resistance at 1.1400.
On the support side, the nearest support level for EUR/USD is located at 1.1300. In case EUR/USD declines below 1.1300, it will move towards the next support at 1.1270. A successful test of this level will open the way to the test of the support at 1.1230.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
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