The EUR/USD pair gained some traction in the last hour and added to its daily gains. As of writing, the pair is trading at 1.1765, gaining 0.35% on the day.
Despite today's advance, the pair is marching towards a negative close on a weekly basis for the first time since the first week of July. However, it's still too early to suggest that a deeper bearish correction is underway as this week's price action was mostly technical amid a lack of significant fundamental catalysts. Both the FOMC and the ECB released their July meeting minutes earlier this week but the market reaction was limited as they didn't offer any major surprises. The ECB policymakers sounded their concerns over the euro strength while the FOMC members reiterated that they were going to continue to monitor the inflation closely before deciding on the next interest rate hike.
On the other hand, the US Dollar Index, which struggled to make a decisive bullish recovery amid the ongoing political drama in the U.S. this week, fails to give any clear clues regarding its next short-term direction.
Next week, Mario Draghi, the president of the ECB, and Janet Yellen, the chairwoman of the Federal Reserve, will be giving speeches at the Jackson Hole Symposium. Although Reuters claimed in a recent report that Draghi would not deliver a new policy message at the conference, investors will be following the event closely. Yellen will be speaking on financial stability and is likely to refrain from delivering any messages on the monetary policy.
Technical outlook
Valeria Bednarik, Chief Analyst at FXStreet, writes, "the pair maintains a neutral short-term stance early US session, trading below its 100 SMA and around a 20 SMA in the 4 hours chart, yet both moving averages lack clear directional strength. In the same chart, technical indicators hover around their mid-lines, lacking directional strength. A bearish extension could be seen on a break below 1.1690, while a break above 1.1820 should favor additional gains for today, but limited to the 1.1860 price zone."
According to the analyst, supports for the pair could be seen at 1.1690, 1.1660 and 1.1620 while resistances align at 1.1770, 1.1820 and 1.1860.
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