EUR/USD is keeping its narrow range below 1.0900 in the European morning. The US Dollar is underpinned by the safe-haven demand on renewed US-China trade issues, which is keeping investors on the edge. The pair awaits EU data and Fed Minutes for fresh impetus.
The EUR/USD fell modestly on Tuesday, on a quiet day across financial markets. The US holiday limited price action. The pair moved with a bearish bias and fell modestly without any new cataclysms. On Wednesday, volatility is likely to pick up with Eurozone economic data and the release of FOMC minutes. The Euro lagged and fell versus the pound on a quiet day without any relevant economic reports.
The US dollar posted mixed results on US Independence Day. Market participants remained on the sidelines. Trading activity will likely be back to normal on Wednesday. The focus is set on the FOMC minutes of the last meeting. Afterwards, attention would turn to US labor market data. On Thursday, the ADP Employment, Jobless Claims, and the JOLTS reports are due, and on Friday, it’s Nonfarm Payrolls. These numbers will help shape expectations regarding what the Federal Reserve will do next.
Relevant economic data is due on Wednesday in the Eurozone. The May Producer Price Index (PPI) is due, with the annual rate expected to decline from 1% to -1.3%. Such numbers would be welcome news for the European Central Bank (ECB). Besides the PPI, the final reading of the Markit Services PMI is due, with no relevant revisions expected.
The US holiday kept price actions contained on Tuesday, with EUR/USD moving in a small range with a bearish bias. The pair dropped under 1.0900, falling toward 1.0880. The outlook has not changed much during the last hours, with the upside potential limited and the Euro supported by the 1.0850 area.
On the 4-hour chart, the technical indicators show mixed signs, with the Relative Strength Index (RSI) turning south below 50, and Momentum moving north above midlines. On the downside, the key support stands around 1.0850, and while above it, losses are likely to be limited. A slide below would expose last week’s low.
On the upside, the key area is a downtrend line around 1.0925 and the 1.0930 resistance area. If the Euro rises above it, it could unleash bullish potential, targeting the 1.0965 area. Above that, attention would turn to 1.1000.
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