EUR/USD benefits from risk-off and weaker DXY ahead of PMIs, FOMC

The EUR/USD pair jumped back on the bid in the Asian trades, as the USD recovery stalled amid repositioning ahead of the FOMC minutes due later today.           

EUR/USD back above 1.1350

The main currency pair is on a steady recovery path so far this Wednesday, as the USD bulls face exhaustion amid tumbling Treasury yields and increased nervousness ahead of the release of the FOMC June meeting minutes, which will throw fresh light on the next policy move by the Fed. Markets are widely expecting to hint at a Fed rate hike by the year-end and balance sheet normalization process to begin this Sept.

Moreover, the funding currency Euro finds support from widespread risk-aversion induced by escalating geo-political tensions, flared up by North Korea’s missile launch. The Asian equities are down nearly -0.50%, while Treasury yields slump -0.55% to -1.15% across the curve.

On Tuesday, the EUR/USD pair consolidated the downside sub-1.1350 levels, as the US dollar remained modestly flat across the board amid a lack of catalyst and thin trades, in the wake of Independence Day celebrations in the US.

Ahead of the FOMC minutes release, the major will take cues from a raft of final services PMI reports from the Euro area and Eurozone retail sales data, followed by the US factory orders due on the cards in the NA session.

EUR/USD Technical Levels

According to Valeria Bednarik, Chief Analyst at FXStreet: “In the 4 hours chart, the 20 SMA turns south above the current level, whilst technical indicators remain within bearish territory, although with limited downward strength amid the absence of volume. The key support anyway, remains to be 1.1290, the low set on June 28th, with a break below it favoring a steeper decline ahead. Support levels: 1.1340 1.1290 1.1250 Resistance levels: 1.1380 1.1420 1.1460.”