- EUR/USD rose nearly 50 pips after the release of the July minutes.
- All Fed members agreed to raise 75 basis points at the July meeting.
- Fed members acknowledge that they will slow the pace of tightening at “some point”.
The EUR/USD soared over the last hour due to the release of the Federal Reserve Open Market Committee (FOMC) July minutes, which lifted the shared currency close to earlier daily highs of 1.0198, though stabilized around 1.0180. At the time of writing, the EUR/USD is trading at 1.0190.
FOMC Minutes Summary
The US Federal Reserve revealed in its minutes that all participants agreed to raise rates by 75 basis points, while many of them considered that the Fed could tighten more if necessary. Fed officials added that further hikes would depend on data, while acknowledging that it would be wise to slow the pace of hikes at some point.
On inflation, Fed members said there were “little signs” that inflation was abating and acknowledged that it would take “considerable” time for the situation to resolve itself. Turning to economic conditions, policymakers said the strength of the labor market suggests economic activity is stronger than the weak second-quarter reading implies, raising the possibility of an upward revision of the GDP.
The EUR/USD pair rose strongly, as the 5-minute chart below shows. Although the pair fell towards 1.0185, the buying pressure made the pair reach the daily high at 1.0202. Market participants’ interpretation of the Minutes is perceived as “dovish,” despite efforts by Fed spokespeople in recent weeks.
EUR/USD 5 minute chart
Meanwhile, the US dollar index trimmed earlier gains and rose 0.02% to 106,511, while the 10-year US Treasury yield rose seven basis points to 2,884%, after the minutes were released.
Separately, earlier US data released by the Commerce Department reported that July retail sales rose 10.3% year-on-year, beating forecasts of 8.3%, while the monthly reading was flat, missing expectations. . Excluding cars and gasoline, sales increased by 0.4% year-on-year, compared to -0.1%.
EUR/USD Key Technical Levels
|Last Price Today||1.0185|
|Today’s Daily Change||0.0014|
|Today’s Daily Change %||0.14|
|Today’s Daily Opening||1.0171|
|20 Daily SMA||1,021|
|50 Daily SMA||1.0307|
|100 Daily SMA||1.0507|
|200 Daily SMA||1.0882|
|Previous Daily High||1.0195|
|Previous Daily Minimum||1.0123|
|Previous Maximum Weekly||1.0369|
|Previous Weekly Minimum||1.0159|
|Monthly Prior Maximum||1.0486|
|Previous Monthly Minimum||0.9952|
|Daily Fibonacci 38.2%||1.0167|
|Daily Fibonacci 61.8%||1,015|
|Daily Pivot Point S1||1.0131|
|Daily Pivot Point S2||1.0091|
|Daily Pivot Point S3||1.0059|
|Daily Pivot Point R1||1.0203|
|Daily Pivot Point R2||1.0235|
|Daily Pivot Point R3||1.0276|
Source: Fx Street