EUR/USD in mid-range near 1.2350 ahead of IFO, PMIs

EUR/USD is extending the weekly advance above 1.2300 the figure on Thursday, although the upside appears so far limited in the 1.2370 region.

EUR/USD bid on FOMC, looks to data

Spot gathered further steam following the FOMC meeting on Wednesday, where the Federal Reserve raised the overnight funds rate to a range of 1.50%-1.75%, broadly in line with market expectations.

However, the Committee kept the view of three rate hikes this year, while revised up its projections for 2019 and 2020 to 2.9% and 3.4%, respectively. Furthermore, rate-setting members updated their outlook on the economy and now see it expanding 2.7% this year (from 2.5% previous).

Inflation (or the lack of it) remains a critical issue, as the Committee left the outlook on the Core-PCE unchanged at 1.9% for the current year and revised higher the Core-PCE to 2.1% for the next year (from 2.0%).

In the meantime, spot is consolidating in the upper end of the weekly range above the 1.2300 handle, fully reverting Tuesday’s sharp drop and at the same time flirting with multi-day peaks, always on the back of renewed and strong presence of sellers around the buck.

Later in the session, advanced PMIs in the euro bloc will be in the limelight along with the release of the German IFO for the month of March. Across the pond, Initial Claims are due seconded by Markit’s preliminary Manufacturing/Services PMI.

EUR/USD levels to watch

At the moment, the pair is gaining 0.12% at 1.2353 and a breakout of 1.2414 (high Mar.14) would target 1.2448 (high Mar.8) en route to 1.2557 (2018 high Feb.16). On the flip side, immediate contention emerges at 1.2241 (low Mar.21) seconded by 1.2206 (low Feb.9) and finally 1.2165 (low Jan.18).