- EUR/USD rises to 1.0198 and quickly pulls back to 1.0160.
- The dollar and the euro are the best performers on Wednesday.
- Market participants await the FOMC Minutes.
The EUR/USD continues to move sideways on Wednesday around 1.0160/70 ahead of the FOMC Minutes release. The pair approached towards 1.0198, reaching the highest level in two days, but quickly pulled back towards 1.0160. Economic data released in the US showed that retail sales stagnated in July, against expectations of a 0.1% rise. The details of the report were above the market consensus. Later on Wednesday, the Federal Reserve will publish the minutes of its last meeting, in which it raised the federal funds rate by 75 basis points. Market participants will be looking for clues about the central bank’s next steps.
Analysts at Brown Brothers Harriman expect the minutes to be very aggressive. “It was not until Chairman Powell’s post-decision press conference that markets saw what they believed to be a dovish pivot, when he acknowledged that the pace of future rate hikes will depend on incoming data…Given Since the Fed has embarked on a corrective communication effort since that meeting, the Minutes should reveal more about the Fed’s aggressive thinking then.” This scenario could be bullish for the US dollar.
DXY is up 0.22% on Wednesday, supported by rising yields and risk aversion. The euro is also gaining ground. EUR/CHF rises strongly for the second day in a row, recovering almost a hundred pips from its historical lows, approaching 0.9700. EUR/GBP is at two-day highs near 0.8450, despite higher than expected UK inflation data.
Short term outlook
EUR/USD continues to move sideways below the 20-day SMA today at 1.0210 and also continues to eye the critical support at 1.0100/10. A break below 1.0100 should clear the way for further weakness. On the other hand, above 1.0210, the euro could strengthen. However, a consolidation above 1.0270 is needed to test the 55-day SMA that capped last week’s rally, currently at 1.0335.
|Last Price Today||1.0168|
|Today’s Daily Change||-0.0003|
|Today’s Daily Change %||-0.03|
|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