EURUSD decline on post FOMC greenback bid. Odds of a September rate cut are getting a second look from investors. EUR/USD knocked lower on Wednesday after the Federal Reserve latest meeting minutes revealed the Federal open market committee are grimly determined to wait for more proof inflation will ease to 2%, sending risk appetite lower as rate cut hungry investors keep hoping for dovish signs from the US Central bank.

While the FOMC’s latest meeting minutes didn’t rule out a September rate cute directly, investors are growing nervous that the Fed will not be able to find enough confirming data that inflation is making definitive progress to the FED’s 2% annual inflation target. Odds of a September quarter- point rate cut have eased to 60% according to the CME’s Fed watch tool.

The European Central bank President Christine Lagarde communicated yesterday that she is really confident” that euro zone is inflation is under control.

Technical Outlook

EUR/USD has pulled back from last week high and simultaneous touch of channel resistance as the quieter week naturally favoured a dollar recovery. The US dollar dropped notably after the lower CPI print and clawed back almost all of the loss this week with Thursday and Friday price action is still to come.

The pair is now test the support channel as the nearest obstacle to the short term bearish move. The ascending channel remains intact, maintaining the border EUR/USD uptrend. On the monthly chart we say the market is fairly positive but by looking at the weekly chart we can suggest that small retracement can be seen before that, as on the weekly chart the market testing the resistance level as further from their we can expect that the bearish move will be on till level 1.0694 so might be sellers are getting chance to in the market and marked their profit, till now buyers could wait for the right level to make and entry. The EUR/USD drifted below the 200 hour exponential moving average at 1.0834 and the fibre is battling to keep afloat of the 1.0820 level. The pair has eased back after a failed bull run at the 1.0900 handle.

Daily candles are inching towards the 200 day EMA at 1.0802 and the EUR/USD has closed in the red for three for the last four straight trading days. Despite a near term bearish pullback, the pair is still up from the last major swing low into 1.0600 in mid –April.