EUR/USD Tests Support At 1.0600

Key Insights

  • EUR/USD pulls back after yesterday’s rally. 
  • Today, traders will focus on the job market data from the U.S. 
  • A move below 1.0600 will push EUR/USD towards the support level at 1.0580.

U.S. Dollar Gains Ground Against Euro

EUR/USD is currently trying to settle below the support at 1.0600, 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 102.75. If this test is successful, the U.S. Dollar Index will head towards the 103 level, which will be bearish for EUR/USD.

Yesterday, EU reported that Euro Area Retail Sales declined by 0.4% month-over-month in March, compared to analyst consensus which called for a decline of 0.1%.

Today, foreign exchange market traders will focus on the job market data from the U.S. Initial Jobless Claims report is expected to show that 182,000 Americans filed for unemployment benefits in a week. Continuing Jobless Claims are projected to decline from 1.41 million to 1.4 million.

Traders will also keep an eye on the developments in U.S. government bond markets. Yesterday’s comments from Fed Chair Jerome Powell were less hawkish than expected, but Treasury yields stay close to their recent highs. In case yields continue to move higher, the U.S. dollar will get more support.

Technical Analysis

eur usd may 5 2022

EUR/USD is testing the support level at 1.0600. In case this test is successful, EUR/USD will move towards the next support, which is located at 1.0580.

A move below the support at 1.0580 will open the way to the test of the support at 1.0550. If EUR/USD declines below this level, it will head towards the next support level at 1.0525.

On the upside, the nearest resistance level for EUR/USD is located at 1.0630. If EUR/USD settles above this level, it will head towards the next resistance at 1.0650. A successful test of the resistance at 1.0650 will push EUR/USD towards the resistance at the 20 EMA at 1.0680.

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