EUR/USD retreats from two-day highs, remains sideways under 1.0200


  • EUR/USD spikes to 1.0198 and quickly pulls back to 1.0160.
  • US dollar and euro among top performers on Wednesday.
  • Market participants await FOMC minutes.

The EUR/USD continues to move sideways on Wednesday around 1.0160/70 ahead of the release of the FOMC minutes. The pair made a run to 1.0198, hitting the highest level in two days but it quickly pulled back toward 1.0160. Economic data released in the US showed Retail Sales stagnated in July, against expectations of a 0.1% increase. The details of the report were above market consensus. Later on Wednesday, the Federal Reserve will release the minutes of its latest meeting when it raised the Fed Funds rate by 75 basis points. Market participants will look for clues about the next steps of the central bank.

Analysts at Brown Brothers Harriman expect the minutes to come in very hawkish. “It wasn’t until Chair Powell’s post-decision press conference that markets saw what they believed was a dovish pivot, when he acknowledged the pace of future rate hikes will depend on incoming data (…) Because the Fed has embarked on a corrective communication effort since that meeting, the minutes should reveal more about the Fed’s hawkish thinking then.” Such a scenario could be bullish for the US dollar.

The DXY is up by 0.22% on Wednesday, supported by higher yields and risk aversion. The euro is also gaining ground. EUR/CHF is up sharply for the second day in a row, recovering almost a hundred pips from record lows, approaching 0.9700. EUR/GBP is at two-day highs near 0.8450 despite higher-than-expected UK inflation data.

Short-term outlook

The EUR/USD continues to move sideways under the 20-day Simple Moving Average, today at 1.0210 and also still looking at the 1.0100/10 critical support. A break under 1.0100 should clear the way to more weakness. On the flip side, above 1.0210, the euro could strengthen. Still, a consolidation above 1.0270 is needed for a test of the 55-day SMA that capped the rally last week, currently at 1.0335.

Technical levels

EUR/USD

Overview
Today last price 1.0182
Today Daily Change 0.0011
Today Daily Change % 0.11
Today daily open 1.0171
 
Trends
Daily SMA20 1.021
Daily SMA50 1.0307
Daily SMA100 1.0507
Daily SMA200 1.0882
 
Levels
Previous Daily High 1.0195
Previous Daily Low 1.0123
Previous Weekly High 1.0369
Previous Weekly Low 1.0159
Previous Monthly High 1.0486
Previous Monthly Low 0.9952
Daily Fibonacci 38.2% 1.0167
Daily Fibonacci 61.8% 1.015
Daily Pivot Point S1 1.0131
Daily Pivot Point S2 1.0091
Daily Pivot Point S3 1.0059
Daily Pivot Point R1 1.0203
Daily Pivot Point R2 1.0235
Daily Pivot Point R3 1.0276

 

 

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