EUR/USD flirting with lows near 1.2380 ahead of ZEW

• The pair is on the defensive around 1.2380 today.
• US yields recovers the 2.90% handle and above.
• US markets back to normalcy, ZEW next on tap in Euroland.

The sentiment around the shared currency remains depressed during the first half of the week and is now dragging EUR/USD to test the lower end of the weekly range in the 1.2385/80 band.

EUR/USD focused on ZEW, FOMC

Spot is losing ground for the third session in a row on Tuesday in response to a persistent pick up in the demand for the greenback, in turn supported by a rebound in US yields.

In fact, yields of the key US 10-year note regained the 2.90% neighbourhood and above during overnight trade, lending at the same time extra legs to the bid tone surrounding the buck.

Data wise in Euroland, the German/EMU ZEW survey is next on tap along with the Ecofin meeting and the advanced consumer sentiment gauge measured by the European Commission.

Across the pond, nothing scheduled for today while investors should start to shift their attention to the FOMC minutes, to be published tomorrow.

EUR/USD levels to watch

At the moment, the pair is losing 0.23% at 1.2378 facing immediate contention at 1.2353 (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).