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EUR/USD pulls back from two-day highs and remains sideways below 1.0200

  • 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.

Technical levels


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

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