Home EUR/USD holding on to 1.1200 ahead of Powell, FOMC minutes
FXStreet News

EUR/USD holding on to 1.1200 ahead of Powell, FOMC minutes

  • EUR/USD remains parked around the 1.1200 area.
  • The broad-based sideline theme prevails in global markets.
  • Fed’s Powell and FOMC minutes next of relevance in the day.

The demand for the shared currency stays subdued on Wednesday and prompts EUR/USD to navigate familiar ranges in the 1.1200 region.

EUR/USD now looks to US events

The pair’s strong decline seems to have met decent contention near 1.1190 (Tuesday) just to return later to the current comfort zone in the 1.1200 neighbourhood.

Declining German yields, ongoing economic slowdown in the euro area and the prospects of rate cuts by the ECB along with the potential return of QE are all weighing on spot, which is trading in 3-week lows and around 2-cents lower from peaks beyond 1.14 the figure recorded in late June.

Data wise in Euroland, Italian Industrial Production figures will be the sole release today, although all the attention will be on the congressional testimony by Fed’s Powell and the publication of the FOMC minutes.

What to look for around EUR

The single currency have come under strong selling pressure on the back of renewed and increasing speculations of another wave of monetary stimulus from the European Central Bank in the near term, via interest rate cuts and the resumption of the QE programme. Furthermore, the downside in EUR has intensified after the recent breakdown of the critical 200-day SMA in the 1.1330 region, opening the door to extra losses in the short-term horizon. Also weighing on the currency, the dovish stance from the ECB appears reinforced by the recent appointment of ex-IMF’s C.Lagarde to succeed M.Draghi. On the macro scenario, the slowdown in the region looks unremitting and it also reinforces the current accommodative attitude of the central bank.

EUR/USD levels to watch

At the moment, the pair is gaining 0.08% at 1.1215 and a break above 1.1231 (55-day SMA) would target 1.1326 (200-day SMA) en route to 1.1412 (high Jun.25). On the other hand, the next up barrier lines up at 1.1193 (monthly low Jul.9) followed by 1.1181 (low Jun.18) and finally 1.1106 (2019 low May 23).

FX Street

FX Street

FXStreet is the leading independent portal dedicated to the Foreign Exchange (Forex) market. It was launched in 2000 and the portal has always been proud of their unyielding commitment to provide objective and unbiased information, to enable their users to take better and more confident decisions.