EUR/USD Faces Downside Pressure Ahead of FOMC Minutes; Technical Levels in Focus

The euro traded with a bearish near-term tone against the U.S. dollar, as the currency pair held below the 20-day exponential moving average (EMA) at 1.1460 and tested the 50-day EMA at 1.1774, with technical indicators suggesting limited upside follow-through.

During the European session, EUR/USD traded marginally lower at around 1.1433, with the U.S. Dollar Index (DXY) near 100.92, as investors awaited the release of the Federal Open Market Committee (FOMC) minutes of the June policy meeting. The Relative Strength Index (14) at 41.9 stayed below the neutral 50 line, hinting at lingering downside pressure. Immediate resistance is located at the 20-day EMA around 1.1460, and a sustained break above this level would be needed to ease the current bearish bias and open the way toward 1.1500. On the downside, the yearly low around 1.1330 is key support; a break below it would expose the pair to the 29 May 2025 low at 1.1210.

In the June monetary policy press conference, the Fed chair said that policymakers agreed that the “so-called forward guidance is not well suited to the current policy conjuncture.” Similarly, an ECB Governing Council member denied providing cues regarding the central bank’s decision in July, stating, “We are not doing forward guidance so I won’t say what we will do in July.”

The pair also gained ground after three days of losses, trading around 1.1790 during Asian hours. The 14-day RSI at 47 reflected easing momentum, with the RSI below 50 keeping momentum balanced and limiting follow-through. The 50-day EMA rises, with price holding marginally above it, while the nine-day EMA has flattened, keeping a short-term cap on recovery. Initial support lies at the 50-day EMA at 1.1774; a drop back under the medium-term average would strengthen the bearish bias and expose the two-month low at 1.1578, recorded on January 19. The pair tests the immediate barrier at the psychological level of 1.1800, followed by the nine-day EMA at 1.1833. A daily close above the short-term average would bring out the bullish bias and open the path toward 1.2082, the highest level since June 2021.

A break below the 50-day EMA could send the market down to the 1.16 level and possibly the 200-day EMA, while a break above the 1.19 level could open the 1.21 level and potentially the 1.23 level.

The euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the U.S. dollar. The European Central Bank (ECB) in Frankfurt, Germany, sets interest rates and manages monetary policy, with its primary mandate being price stability. Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important economic indicator for the euro.