- EUR/USD consolidates the previous rebound amid a cautiously optimistic mood.
- US dollar takes a breather ahead of Fed minutes, the euro awaits Eurozone GDP.
- The shared currency remains weighed down by recession fears and gas crises.
EUR/USD is trading modestly flat above 1.0150, as the US dollar bulls take a breather following a sharp pullback from three-week highs.
Investors turn cautious and refrain from placing any big bets on the main currency pair ahead of the preliminary Eurozone Q2 GDP and the Fed July meeting minutes.
The Eurozone Q2 GDP may revive stagflation concerns amidst record-high inflation rate and the deepening energy crisis in the old continent. Meanwhile, the Fed minutes could offer insights on the size of the rate hike in the upcoming meetings. For September, markets are pricing roughly a 58% chance of a half percentage point Fed rate hike.
Looking at EUR/USD’s daily chart, sellers remain hopeful so long as the price holds below the horizontal 21-Daily Moving Average (DMA) at 1.0208.
Therefore, the 1.0100 support level remains in sight, despite Tuesday’s rebound from almost three-week lows of 1.0122.
The 14-day Relative Strength Index (RSI) has turned flattish but stays beneath the midline, suggesting that any uptick is likely to be sold into.
A sustained move above the 21 DMA will negate the near-term bearish momentum, opening doors for a fresh advance towards the bearish 50 DMA at 1.0295.
On a breach of 1.0100, selling pressure will intensify, as a retest of the parity will be inevitable. Although the 1.0050 psychological level could come to the rescue of EUR bulls.
EUR/USD: Daily chart
EUR/USD: Additional levels to consider
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