EUR/USD loses bullish potential but far from signaling an upcoming slide

EUR/USD is taking a wait-and-see stance ahead of FOMC’s Minutes as the pair is stuck around the 1.1930 level, having spent the day confined to a tight range, although losing bullish momentum in the short-term, FXStreet’s Chief Analyst Valeria Bednarik reports. 

Key quotes

“Comments from Democrat House Leader, Nancy Pelosi, looking for common ground with Republicans to activate the coronavirus aid package had a limited impact on currencies ahead of the FOMC Meeting’s Minutes. While speculative interest does not expect big surprises, it adopted the usual wait-and-see stance. If anything, things policymakers acknowledged the situation remains the same, as improving inflation and employment data is being overshadowed by the fast spread of the coronavirus in the country, which limits the economic comeback.”

“The EU released its June Current Account, which came in at €20.69 B better than the previous €7.95 B. The Union also published July inflation, with the monthly CPI down to -0.4% from 0.3% in the previous month. The annual figure, however, came in as expected at 0.4%, while the core annual CPI hit 1.2%, as expected.”

“The 4-hour chart shows that EUR/USD keeps developing above firmly bullish moving averages, but also that technical indicators ease from highs, holding well into positive levels. The bearish potential is quite limited given the dollar’s broad weakness, yet a corrective slide could take place on a break below the 1.1870 support level.”