Search ForexCrunch
  • EUR/USD looks undecided to surpass the 1.1100 handle.
  • FOMC minutes expected later in the NA session.
  • Fed’s J.Powell speaks on Friday at Jackson Hole.

The shared currency is clinging to its daily gains vs. the Greenback, with EUR/USD trading within a tight range around the 1.1100 mark.

EUR/USD focused on FOMC

The pair is adding to Tuesday’s gains in the proximity of the 1.1100 handle so far today, although a convincing move further north of this area still remains elusive.

In the meantime, spot is seen extending the ongoing consolidation in the very near term, at least until the publication of the FOMC minutes and Powell’s speech. The key events across the pond have somewhat eclipsed the resurgence of the political turmoil in Italy, where PM G.Conte resigned on Tuesday and blamed Lega’s M.Salvini for the government instability.

Later in the NA session, the FOMC will release its minutes from the August meeting. The minutes are likely to show divided views from the members of the Committee regarding the future of interest rates as well as the economic outlook.

What to look for around EUR

EUR has finally succumbed to the downside pressure although another test of YTD lows in the proximity of 1.1020 remains elusive for the time being. Renewed buying interest surrounding the buck, expectations of ECB easing and Italian politics are seen driving the mood around the shared currency at the moment. That said, sustained bullish attempts in the pair still look flimsy amidst ECB’s preparations for a fresh wave of monetary stimulus (most likely to be announced in September), including a potential reduction of interest rates, the re-start of the QE programme and a probable tiered deposit rate system. This scenario has been confirmed as of late following poor results from the euro-docket, adding to the unremitting deterioration of the economic outlook in the region.

EUR/USD levels to watch

At the moment, the pair is losing 0.01% at 1.1098 and faces the next contention at 1.1065 (low Aug.20) seconded by 1.1026 (2019 low Aug.1) and finally 1.0839 (monthly low May 11 2017). On the upside, a break above 1.1140 (21-day SMA) would target 1.1222 (55-day SMA) en route to 1.1282 (high Jul.19).