EUR/USD breaks above 1.0350 on US data, attention turns to FOMC minutes

The EUR/USD is trading around the 1.0375 zone, at the highest level since Friday boosted by a weaker US Dollar and ahead of the FOMC minutes. The Greenback lost momentum following the release of economic reports.

The pair made a clear break above 1.0350 and gained strength. If it continues to rise, the next resistance area is seen at 1.0400. On the flip side, a slide under 1.0320 should weaken the current intraday bullish bias.

Dollar down after US data

The Greenback is losing ground across the board as US yields tumble. The DXY is falling by 0.83%. The US 10-year yield fell to 3.70% while the 2-year dropped to 4.47%.

Earlier on Wednesday, economic data showed an increase to multi-week highs in jobless claims, offset by a bigger-than-expected increase in Durable Goods Orders. More recently, the November preliminary PMI S&P Global showed a decline in the Composite index to 46.3 from 48.3, below the 47.7 of market consensus.  New Home Sales jumped 7.5%, surpassing expectations. The University of Michigan Consumer Sentiment Index recovered from 54.7 to 56.8, above the 55 expected.

Later on Wednesday, the Federal Reserve will release the minutes of its latest meeting. Market participants will look for clues about a potential slowdown in rate hikes. “We look for the minutes to place a lot of emphasis on the likelihood that the terminal rate will need to end up higher than anticipated initially. The Fed still needs to grind down the labor market to align wage and household spending growth with rates more consistent with the inflation target”, said analysts at TD Securities.

On Thursday, Wall Street will remain close due to Thanksgiving Day. In Japan, the Jibun Bank Manufacturing PMI and the Leading Index are due.

Technical levels