EUR/USD hovers above 1.2400, Draghi says exchange rate closely monitored

• EUR/USD briefly drops below 1.2400
• ECB President says euro’s exchange rate will be closely monitored

EUR/USD turned lower during the American session and fell  briefly below 1.2400, as the US dollar continues to enjoy some demand following Friday’s jobs report.

EUR/USD dropped to a low of 1.2398 on Monday before finding support and recovering somewhat. However, the upside has been capped by the 200-hour SMA around 1.2430, leaving the pair confined to a narrow range over the last hours.

Draghi says euro’s exchange rate will be closely monitored by the ECB

ECB President Mario Draghi was speaking before the European Parliament. Draghi said the bank is increasingly confident that inflation will rise amid economic growth but euro's volatility is a potential obstacle. “While our confidence that inflation will converge towards our aim of below, but close to, 2 percent has strengthened, we cannot yet declare victory on this front,” Draghi said in Strasbourg. “New headwinds have arisen from the recent volatility in the exchange rate, whose implications for the medium-term outlook for price stability require close monitoring,” Draghi added.

EUR/USD levels to consider

At time of writing, EUR/USD is trading at 1.2420, 0.26% below its Friday’s close, with immediate supports seen at 1.2398 (intraday low), 1.2384 (Feb 1 low) and 1.2290 (Jan 24 low). On the upside, next resistances line up at 1.2474 (intraday high), 1.2522 (Feb 1 high) and 1.2537 (3-year high, Jan 25).