Euro Is Losing Ground Agaisnt U.S. Dollar
EUR/USD is currently trying to settle below the support at 1.2130 while the U.S. dollar is gaining ground against a broad basket of currencies.
The U.S. Dollar Index managed to settle above the resistance at 90.30 and is moving towards the next resistance at 90.50. If the U.S. Dollar Index settles above this level, it will head towards the 50 EMA at 90.65 which will be bearish for EUR/USD.
Yesterday, EU reported that Consumer Confidence improved from -15.5 in January to -14.8 in February, in line with the analyst consensus. Industrial Sentiment improved from -6.1 to -3.3 while Services Sentiment increased from -17.7 to -17.1. Both reports exceeded analyst expectations.
It looks like rising U.S. Treasury yields have finally managed to provide additional support to the American currency. If Treasury yields continue to move higher, the U.S. dollar may get more support. At the same time, it remains to be seen whether dollar’s upside move will be sustainable as the U.S. will soon introduce another round of economic stimulus.
EUR/USD lost upside momentum and declined towards the support level at 1.2130. This is a worrisome development for the bulls as EUR/USD had decent chances to move higher after it managed to get above the resistance at 1.2175.
However, the upside move was short-lived, and EUR/USD is currently trying to settle below 1.2130. If this attempt is successful, EUR/USD will head towards the 50 EMA which is located at 1.2115. A move below the 50 EMA will open the way to the test of the support at 1.2080. If EUR/USD declines below this level, it will head towards the support at 1.2060.
On the upside, EUR/USD must stay above the support at 1.2130 to have a chance to develop upside momentum in the near term. The next resistance level is located at 1.2155. If EUR/USD gets above this level, it will head towards the resistance at 1.2175. A successful test of this level will open the way to the test of the resistance at 1.2220.
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This article was originally posted on FX Empire