EUR/USD holding on above 1.2300 ahead of FOMC

The pair’s bull run lost momentum in the vicinity of 1.2340.
USD off daily highs after DXY briefly approached the 90.00 handle.
US existing home sales dropped 3.2% in January, FOMC up next.

Pablo Piovano FXStreet

A bout of selling orders around the greenback allowed EUR/USD to attempt a break higher although the bullish attempt run out of legs in the proximity of 1.2340.

EUR/USD depressed ahead of FOMC

The downbeat sentiment around the pair remains intact so far this week, although it has managed well to stage a rebound from earlier lows in the 1.2300 neighbourhood.

The solid recovery of the greenback has been behind the pair’s price action as of late, with the performance of the key US 10-year benchmark taking centre stage. In fact, yields are now sidelined around the 2.90% area, around 5 bp lower than multi-year tops seen last week.

In the data space, lower-than-expected PMIs in the euro area for the current month added to the downbeat momentum around EUR earlier in the session. In the US and before the publication of the FOMC minutes, existing home sales contracted at a monthly 3.2%, or 5.38 million units, while Markit’s advanced manufacturing PMI is seen at 55.9 in February, surpassing estimates.

EUR/USD levels to watch

At the moment, the pair is losing 0.05% at 1.2331 facing immediate contention at 1.2308 (low Feb.21) followed by 1.2276 (low Feb.14) and finally 1.2206 (low Feb.9). On the upside, a breakout of 1.2557 (2018 high Feb.16) would target 1.2598 (61.8% Fibo of the 2014-2017 drop) en route to 1.2886 (high Oct.15 2014).

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Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

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