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EURUSD hovers at 1.1385 support

The EURUSD pair logged mild losses on Monday, January 17, down 0.08% to 1.1407. The key pair traded within the range of 1.1390-1.1435. Volumes were thin due to the Martin Luther King Day holiday stateside, with the fixed income and stock markets offline.

Today’s macro agenda (GMT+3)

  • 10:00 UK: unemployment rate, average earnings (November), claimant count change (December)
  • 13:00 Eurozone: ZEW economic sentiment (January)
  • 13:00 Germany: ZEW economic sentiment and current conditions (January)
  • 16:15 Canada: housing starts (December)
  • 16:30 US: NY Empire State manufacturing index (January)
  • 18:00 US: NAHB housing market index (January)
  • 18:30 Australia: leading indicators (November)

Current outlook

Major currencies turned red during the Asian session amid retreating US index futures, as well as rising UST yields. Yields on 10-year and 5-year US Treasuries hit new two-year highs. Yields are soaring on the back of expectations for a Fed rate liftoff in March. The balance of risks for the EURUSD still shows a downside bias due to monetary policy divergence between the European Central Bank and the Federal Reserve.

By the time of writing, the single currency was trading near 1.1400. Price action is approaching the 1.1385 support line, which acted as resistance for a month and a half. If buyers fail to hold this mark again, they will have to retreat to 1.1285.

Today’s macro releases include ZEW sentiment figures for Germany and the Eurozone for January. These are key data points in determining the EURUSD trajectory until the end of the week.

The picture looks ambiguous in euro cross pairs, so multidirectional fluctuations are likely in the key pair ahead of the North American session. The dynamics of US index futures and the 10-year UST yield will also play a key role in for the EURUSD pair. In the upshot, slight strengthening of the euro to 1.1420 could be in the cards.


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