EUR/USD: Euro defends yesterday's gains ahead of FOMC Minutes

The single European currency remains a little above the level of 1,08 trying to defend yesterday's gains where in a day where the macroeconomic agenda was quite indifferent it brought the surprise and managed with a slight upward momentum to secure the level of 1,08 again.

I'm having a hard time pinpointing what the catalyst was that worked in favor of the euro yesterday and managed to develop a mild upward momentum, as although as I mentioned in previous articles my thoughts of buying the euro remained on the table, yesterday's reaction surprised me.

A reasonable explanation would probably be the placement of a part of the investors before today's announcement of the latest Fed's Minutes with the hope that they will not confirm President Jerome Powell aggressive rhetoric a few weeks earlier.

On the other hand the decoding of the Minutes which will confirm that inflationary pressures continue to worry Fed officials and confirm that the possibility of interest rate cuts is shifting towards the summer is likely to remove yesterday's upward movement of the Euro with the pressures return to the game.

Yesterday's rise in the European currency came to remind us that the European currency retains its ability to react and any new lows will not be easy.

On today's agenda apart from the announcement of the Fed's Minutes there is nothing else important so all interest is focused towards the end of the day.

Ahead of the important announcement a wait-and-see attitude is a good thought, with the possibility the US currency return to the fore remains on the table, especially if the Minutes feed into such a scenario.