EUR/USD keeps 1.2400 amidst USD strength

• USD started the week on a bid tone.
• Spot found support around 1.2380.
• US PCE, ECB-speak in the limelight later.

After testing daily lows in the 1.2385/80 band during early trade, EUR/USD regained the 1.2400 and above although it remains within the negative ground against the backdrop of a positive sentiment surrounding the buck.

EUR/USD focus on ECB-speak, US data

The pair seems to be consolidating in the upper end of the recent range, shedding some ground after last week’s fresh tops beyond 1.2500 the figure. The sell off in the greenback, which has dragged the US Dollar Index (DXY) to multi-year lows in sub-89.00 levels last week, appears somewhat mitigated for the time being.

In fact, USD regained some buying interest after President Trump advocated for a stronger USD at the WEF in Davos last week, in clear contrast with previous comments by US Treasury Secretary S.Mnuchin.

In the data space, ECB’s S.Lautenschlaeger and B.Coeure are due to speak, while US inflation figures measured by the PCE are next on tap in the NA session seconded by personal income/spending for the month of December.

EUR/USD levels to watch

At the moment, the pair is losing 0.14% at 1.2407 facing the next support at 1.2385 (low Jan.29) followed by 1.2310 (10-day sma) and finally 1.2172 (21-day sma). On the flip side, a breakout of 1.2537 (2018 high Jan.25) would target 1.2571 (high Dec.16 2014) en route to 1.2600 (psychological level).