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EUR/USD is set to lower towards the 1.0780 support in the opinion of analysts at TD Securities. The Federal Open Market Committee (FOMC) and  US Housing Starts data are the main events of the day. 

Key quotes

“Though the USD runs a bit rich on our tactical dashboard, the discount is not large enough to have us reconsider its appeal. As a result, we are inclined to see EUR/USD’s bleed lower continue with 1.0710/80 support range now in view.”

“The FOMC meeting minutes will lead the U.S. economics calendar on Wednesday. We believe the minutes are unlikely to include any major new revelations on the near-term outlook. However, they will likely include an update on the review being conducted by the Fed. We expect the review to result in the adoption of some form of average inflation targeting, which is dovish given sub-2% inflation.” 

“Lastly, we forecast a decline in housing starts to a 1,430K AR in January from an exaggerated 160K in December.”