EUR/USD weaker, breaks below 1.2400

• Spot remains offered in sub-1.2400 area.
• USD firm on the upper end of the range.
• FOMC minutes next big event.

The selling bias around the shared currency remains well and sound at the beginning of the week, with EUR/USD now coming down to test once again the critical support at 1.2400 the figure.

EUR/USD now looks to FOMC

Spot is down for the second consecutive session so far on Monday, following a key ‘reversal day’ charted on Friday and at the same time extending the leg lower despite clinching fresh 2018 tops in the vicinity of 1.2570 last week.

The sentiment around the shared currency remains subdued today, while the pair continues to navigate within a tight range and amidst marginal trade conditions and low volatility in response to the absence of activity in the US markets today.

Furthermore, dips in EUR should appear to remain shallow, as the currency remains supported by strong fundamentals in the region coupled with the huge and persistent current account surplus.

More from the positioning front noted EUR speculative net longs receded to the lowest level since December 26 during the week ended on February 13, as per the latest CFTC report.

Looking ahead, the FOMC minutes are due on Wednesday while the ECB will publish its minutes on Thursday. The ECB event has gained some extra attention as of late as market participants will be looking for further details on the somewhat dovish message at the January meeting.

EUR/USD levels to watch

At the moment, the pair is losing 0.23% at 1.2373 facing immediate contention at 1.2350 (10-day sma) seconded by 1.2206 (low Feb.9) and finally 1.2165 (low Jan.18). On the upside, a breakout of 1.2757 (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).