EUR/USD picks up a bid ahead of Eurozone PMIs and ECB minutes

EUR/USD faded the spike to 1.1371 yesterday as the Fed minutes were slightly more hawkish-than-expected.
The pair picked up a bid in Asia and could find takers in Europe if the Eurozone PMIs beat expectations, alleviating recession fears. ECB minutes will likely sound dovish, but the delay in the rate hike has been priced in.

Omkar Godbole FXStreet Contributor

EUR/USD is currently trading at 1.1350, representing a 0.14 percent gain on the day.

The common currency had jumped to a high of 1.1371 in the NY session yesterday. The move to two-week highs, however, was short-lived, as the Fed minutes carried a slightly hawkish tilt of several members still believing that the most likely path in rates was still higher if the economy evolves as expected.

As a result, EUR/USD erased gains and closed with marginal losses at 1.1336. The pair, however, picked up a bid in Asia, possibly tracking the rise in the offshore Chinese yuan to 7-month highs.

The bid tone around the common currency will likely strengthen further if the preliminary German and Eurozone PMI indices for February beat estimates, alleviating recession fears to some extent.

The minutes of the European Central Bank's (ECB) January meeting, also scheduled for release today, are likely to reiterate growth concerns. The EUR pairs, however, will likely reamain resilient as the central bank's dovish shift has been penciled in by markets - EUR/USD fell from 1.1514 to 1.1234 in two-weeks to Feb. 15.

Add to that, the bullish crossover between the 5- and 10-day moving averages (MAs) and the path of least resistance appears to be on the higher side.

Technical Levels

1. R3 1.1414
2. R2 1.1393
3. R1 1.1367
PP 1.1346
1. S1 1.1319
2. S2 1.1298
3. S3 1.1272

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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