EUR/USD probing lows in sub-1.2400 levels

• Spot dropped below 1.2400 in early trade.
• USD better bid after FOMC.
• FOMC signalled further tightening likely in March.

The renewed buying interest around the greenback is keeping EUR/USD depressed during the European morning, testing the lower end of the range around the 1.2400  neighbourhood.

EUR/USD attention on PMIs, US ISM

Spot came under selling pressure after the FOMC meeting delivered a hawkish twist to its usual statement, now seeing that ‘further rate hikes are warranted’. In addition, the Committee reiterated that risks to growth are ‘roughly balanced’, while it expects inflation to pick up this year.

The pair briefly touched the area of 1.2380 earlier in the session, although dip-buyers appear to have emerged at these levels, reinforcing this area as a quite a moderate support.

In the data space, final January’s manufacturing PMIs are due in the euro area later in the morning, while the US ISM manufacturing should grab all the markets’ attention later in the NA session

EUR/USD levels to watch

At the moment, the pair is losing 0.11% at 1.2399 facing the immediate support at 1.2361 (10-day sma) followed by 1.2336 (low Jan.30) and finally 1.2225 (21-day sma). On the other hand, a breakout of 1.2475 (high Jan.31) would target 1.2537 (2018 high Jan.25) en route to 1.2571 (high Dec.16 2014).