EUR/USD stuck around 1.0430 ahead of FOMC

EUR/USD keeps its bid tone well and sound today, navigating the 1.0430 area after dropping to fresh 14-year lows in the 1.0340/35 band on Tuesday.

EUR/USD all eyes on the FOMC

Spot has regained the 1.0400 handle and beyond today, managing to rebound from fresh 14-year troughs near 1.0340 area on Tuesday as the rally in the greenback seems to have run out of steam for the time being.

The upside momentum around EUR lacked of follow through today despite advanced inflation figures in the euro bloc showed consumer prices are expected to rise more than initially estimated for the month of December.

Later in the NA session, the current upside will be put to the test as market consensus expects the FOMC minutes to come in on the hawkish side, with the ‘dots plot’ and the potential overshooting of the Fed’s employment and inflation goals likely to be on top of the debate.

The ongoing resilience around EUR finds extra support on the positioning front, as speculative net shorts have decreased to levels last seen in late June 2016 during the week ended on December 27, according to the latest CFTC report.

EUR/USD levels to watch

The pair is now up 0.20% at 1.0427 and a breakout of 1.0534 (high Jan.2) would target 1.0654 (spike Dec.30) en route to 1.0687 (55-day sma). On the downside, the immediate support aligns at 1.0350 (2016 low Dec.20) ahead of 1.0339 (2017 low Jan.3) and finally 1.000 (psychological level).