EUR/USD takes a sharp U-turn, drops back to 1.1640

The EUR/USD pair faced rejection once again near the 1.1680 region and from there came under heavy selling pressure at the European open, after the US dollar staged a solid comeback across its main competitors.

EUR/USD: Focus shifts to FOMC minutes

The spot eroded 50-pips rapidly and now hovers near daily lows of 1.1637, as the monetary policy divergence between both continents is back in play amid a lack of fresh fundamental catalysts and ahead of the FOMC June meeting minutes release due tomorrow. The Fed remains on track for two more rate hikes this year amid strengthening US economy.

However, it remains to be seen If the major can hold the 1.16 handle in the day ahead, as better-than-expected German and Eurozone June services PMI data could rescue the EUR bulls.

Meanwhile, markets continue to digest the Financial Times (FT) report that the European Union (EU) is s considering talks on a tariff-cutting deal between the world’s big car exporters to prevent an all-out trade war with the US.

With the Euroland data out of the way, there is no macro news on the cards as the US observes the Independence Day holiday. Hence, the pair will continue to get influenced by the US dollar price-action.

EUR/USD Technical Levels:

Nenad Kerkez, Head of Technical Analysis and Trading at Elite CurrenSea, explains: “The EUR/USD has been contained in a consolidation triangle and we can see that the price is close to the vortex now. However, a three touch trend line has been spotted at resistance and as long as the EUR/USD is below 1.1687, there is a chance for a drop towards 1.1644. Below 1.1644 targets are 1.1629 and 1.1605. Only above 1.1687, the pair should be bullish eventually reaching 1.1711 and 1.1735.”