- Spot dropped further early Thursday to the area of 1.2270.
- USD keeps the bid fashion following FOMC minutes.
- German IFO, ECB minutes next on relevance in Euroland.
The downside pressure around the European currency remains intact so far this week, taking EUR/USD to the 1.2270/65 band, or session lows.
EUR/USD now looks to the ECB
The pair has been trading in the negative ground since Friday amidst a strong pick up in the sentiment around the greenback. However, it remains to be seen whether the ongoing rebound in the buck is in fact a convinced change of heart from investors rather than a corrective up move.
Spot moved lower in tandem with higher US 10-year yields following the somewhat hawkish FOMC minutes published late on Wednesday, where the Committee’s view on the economy remains solid and members appear confident that inflation will reach the Fed’s target sooner rather than later.
On another direction, EUR will be in centre stage later today as the ECB will release its minutes from the January meeting. The focus of attention will be, as usual, on the members’ views on a potential change in the forward guidance. Further releases in the region include the German IFO for the current month.
Across the pond, weekly initial claims are due along with speeches by New York Fed and permanent voter W.Dudley (centrist), Dallas Fed R.Kaplan (non voter, hawkish) and Atlanta Fed R.Bostic (voter, centrist).
EUR/USD levels to watch
At the moment, the pair is losing 0.15% at 1.2264 facing immediate contention at 1.2206 (low Feb.9) followed by 1.2167 (50% Fibo of 2014-2017 drop) and finally 1.2165 (low Jan.18). On the upside, a breakout of 1.2353 (10-day sma) would target 1.2371 (21-day sma) en route to 1.2537 (high Jan.25).
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