EUR/USD parked around 1.2300 ahead of Fedspeak

The buying interest has returned to the US Dollar at the end of the week and keeps EUR/USD depressed around 1.2300 the figure so far today.

EUR/USD gains capped near 1.2350

The pair has quickly faded the spike to the mid-1.2300s recorded in spite of the somewhat hawkish message from the FOMC minutes on Wednesday and after the ECB minutes failed to spark any fresh interest in EUR.

Spot thus navigates in the lower end of the range in the European afternoon while keeps eroding (albeit still below) the resistance line off 2018 lows, today in the 1.2340/45 band.

On the opposite side, the greenback maintains the firm note so far this week despite yields of the key US 10-year benchmark have dropped to fresh daily lows around 2.88%. It is worth recalling that price action around the buck is once again looking at the Federal Reserve for direction, while the debate between 3 or 4 rate hikes this year appears to dominate the discussion among traders in the next months.

In the data space, inflation figures in the euro area matched preliminary readings for the month of January, showing headline CPI rising 1.3% YoY and Core CPI up 1.0% YoY.

Looking ahead, the buck should stay vigilant on speeches by New York Fed W.Dudley (permanent voter, centrist), Boston Fed E.Rosengren (2019 voter, centrist), Cleveland Fed L.Mester (voter, hawkish) and San Francisco Fed J.Williams (voter, centrist).

EUR/USD levels to watch

At the moment, the pair is losing 0.19% at 1.2306 facing immediate contention at 1.2260 (low Feb.22) followed by 1.2206 (low Feb.9) and finally 1.2165 (low Jan.18). On the upside, a breakout of 1.2352 (high Feb.22) would target 1.2369 (21-day sma) en route to 1.2537 (high Jan.25).