EURUSD: Euro spikes in volatile trading session

Traders exited some of their short EURUSD positions, which pushed the single currency higher on Tuesday, however, the uptrend seems fragile and volatile, thus, it looks only like a short-term bounce.

During the US session, the mentioned currency pair was seen changing hands at around 1,1090, some 30 pips higher from intraday lows.

As there were no new macro data on the agenda, investors are getting ready for Wednesday's FOMC minutes, which are expected to be dovish, but this doesn't mean that the US dollar will decline afterward.

Moreover, markets cannot decide which central bank will loosen monetary policy more - the Fed is expected to cut rates twice till the end of the year, but the ECB is forecast to drop something big at its September meeting. It could lower the deposit rate and announce the restart of the QE, or something similar. Therefore, the EURUSD pair could remain choppy till September.

Technically speaking, bulls managed to defend the short-term uptrend from August lows, although with problems, and this support line is now near 1.10750. As long as the pair trades above this level, the short-term outlook seems bullish and the euro might retrace some of its losses.

Dropping below 1.10750 would most likely change this scenario to bearish, targeting the August lows of 1.1030.

On the upside, the resistance seems to be in the 1.1110 area and if the pair breaches above this zone, further gains toward 1.1160 could occur.