- Spot remains in the negative territory and threatens 1.2300.
- USD keeps the bid tone and now targets the 90.00 handle.
- Downbeat flash PMIs add to the daily pullback.
The sentiment around the European currency stays depressed so far this week and is now dragging EUR/USD to challenge the critical support at the 1.2300 handle.
EUR/USD focused on FOMC
Spot keeps grinding lower on Wednesday and has opened the door for a potential test of 1.2300 the figure in case the prevailing selling impulse gathers further traction.
Earlier in the session, lower-than-expected advanced PMIs in the core euro area for the month of February has also collaborated with the current leg lower. The results add to yesterday’s mixed readings from the German/EMU ZEW survey, all weighing down on spot.
Further downside pressure comes from the US money markets, where yields of the US 10-year reference are gyrating around 2.90% after bouncing off session lows near 2.88%. Ahead in the session, attention will be on the 5-year note auction after Tuesday’s 2-year note auction rose to the highest level in a decade, albeit amidst decent demand.
Later in the session, investors will closely follow the publication of the FOMC minutes, with the potential rate path by the Fed and the impact of fiscal stimulus on planned rate hikes on top of the agenda.
In addition, Markit’s flash manufacturing PMI, existing home sales and the API’s report on crude oil stockpiles are also due across the Atlantic
EUR/USD levels to watch
At the moment, the pair is losing 0.17% at 1.2316 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).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.