The EUR/USD closed at 1.18386 after placing a high of 1.19526 and a low of 1.18301. Overall the movement of the EUR/USD pair remained bearish throughout the day. A sharp U-turn in the prices of EUR/USD pairs on Wednesday was due to the US dollar's decisive recovery. The US Dollar Index (DXY) that tracks the US dollar performance against a basket of six major currencies erased the previous day's losses and rose to 93 levels on Wednesday.
The DXY rally was supported by the modest rebound in the US Treasury bond yields when a 10-year US Treasury note rose by 0.9%.
A sharp decline in EUR/USD pair on Wednesday was caused by the minutes of the July meeting of Federal Reserve that highlighted that a highly accommodative stance of monetary policy would be needed for some time.
The minutes revealed that the Federal Open Market Committee was concerned about the road to recovery, and some members of the committee suggested that the additional accommodation could be needed to promote the economic recovery or to return inflation to 2%.
Furthermore, on Wednesday, Trump administration proposed a smaller coronavirus relief bill worth about $500 billion as opposed to one between $1 trillion and $3 trillion that had been previously expected. The previous bill has still not reached a consensus between Democrats and Republicans. However, a new bill raised hopes and increased the market sentiment that added strength in the US dollar and increased the EUR/USD daily losses.
On the data front, at 13:00 GMT, the Current Account Balance from the Eurozone came in as 20.7B against the expected 7.0B in June and supported single currency Euro. At 14:00 GMT, the final consumer price index for the whole bloc remained flat, with the expectations of 0.4%. The Final Core CPI for the year also came in line with the expectations of 1.2%. As most Eurozone data came in line with the expectations, it had almost null-effect on EUR/USD pair on Wednesday.
On Thursday, the European Central Bank will release its accounts of the latest monetary policy meeting and the June's German PPI. On the US side, the Unemployment Claims, CB Leading Index, and the Philly Fed Manufacturing Index will remain under watch by investors to find fresh clues.
Daily Technical Levels
Pivot point: 1.1873
On the technical side, the EUR/USD is trading at 1.1850 level after violating the upward channel that supported the pair at 1.1890 level. On the higher side, the pair is pretty much likely to find resistance at 1.1895 level. The EUR/USD is also supported over the 1.1838 level, which is extended by 50 periods EMA level. Below 1.1838, the pair can drop until the 1.1783 support level. The RSI is suggesting selling, but we should wait for the pair to drop below 1.1835. Good luck!