EUR/USD Braces for Fed Minutes as Downward Bias Deepens

The euro‑dollar pair held steady around 1.1234 on Wednesday as investors turn their focus to the Federal Reserve’s latest meeting minutes for clues on future monetary policy direction.

Market participants are also watching for any remarks from Federal Reserve officials. Weaker‑than‑expected personal‑consumption‑expenditure inflation and soft labor‑market data have softened the Fed’s stance, with pricing models now assigning roughly an 80 % chance that interest rates will stay unchanged at the October meeting.

At the same time, investors remain alert to bond‑market developments after a recent sell‑off. Treasury yields are under pressure from lingering inflation concerns, heightened fiscal risks and the surge in debt issuance aimed at financing artificial‑intelligence initiatives.

Oil prices have risen amid heightened geopolitical tensions, including Iranian attacks on tankers in the Strait of Hormuz and clashes between Saudi and Houthi forces. The escalation reinforces inflation worries and keeps the possibility that the Fed may retain a more hawkish posture for longer.

Technical Analysis

Conclusion

EUR/USD is currently stabilising while investors await the Federal Reserve’s meeting minutes for fresh policy insights. Soft PCE inflation and labor‑market figures have moderated the Fed’s rhetoric, with market pricing now reflecting roughly an 80 % chance that rates will stay unchanged at the October meeting. Nonetheless, lingering inflation pressures, heightened fiscal risks and substantial debt issuance linked to AI development continue to weigh on Treasury markets, and surging oil prices driven by Middle‑East tensions further augment inflation concerns. From a technical standpoint, the exchange rate stays bearish as long as it is trapped below the 1.1244–1.1275 resistance zone, with the next supports eyed at 1.1210, 1.1173 and, should the downtrend accelerate, 1.1129. While oversold oscillator levels suggest the possibility of a brief corrective rally, the dominant trajectory remains downward as long as price action stays beneath the descending resistance line.

Source link