EUR/USD drifted into the midrange on Wednesday after the US Federal Reserve (Fed) published its latest Minutes which showed policymakers continue to remain focused on downside risks. Inconsistent inflationary pressures in the US economy is keeping the Fed back from rate cuts, and policymakers continue to wait for further signs of inflation dropping to the Fed’s desired target range. European and US Purchasing Managers Indices (PMIs) are slated for Thursday, where markets expect a slight improvement in the euro area and a softer print in US activity figures. Friday wraps up the week with a smattering of speeches from policymakers from the European Central Bank (ECB). The Fed’s latest Monetary Policy Report also drops on Friday.
EUR/USD remains on the bullish side of the 200-hour Simple Moving Average (SMA) near 1.0767 as the pair drifts into the high end in the near term. Price action has continued to extend a rough recovery from last week’s dip into the 1.0700 handle, but halting momentum sees bullish sentiment beginning to thin at the intraday level. Daily candlesticks have the pair knocking into the 200-day SMA near 1.0830, and topside momentum is facing a significant technical ceiling. The EUR/USD is still facing a pattern of descending highs, and the pair is still down around 3% from December’s peak bids near 1.1140.
