Volatility ebbs gradually ahead of the upcoming economic data out of the US

The euro continues to oscillate around multi-month lows, struggling to stage a recovery as the dollar remains steady ahead of the FOMC meeting minutes due later today. EURUSD dipped to fresh mid-2020 lows around 1.1225 on Tuesday to settle in the 1.1240 area in early European deals. Bullish attempts were capped by the 1.1275 region, suggesting the path of least resistance for the common currency remains on the downside for the time being.

The USD index holds well despite a retreat in US 10-year Treasury yields on Wednesday. At that, volatility ebbs gradually ahead of the upcoming economic data out of the US, including the GDP report, jobless claims figures, consumer spending data, etc. Should the fundamental disappoint, the greenback could see a downside correction following the recent rally, but it looks like the bearish potential will be limited anyway.

As such, the euro now threatens the 1.1200 major support that, however, should trigger a bounce if comes into the picture in the near term. Now, there are some signs that the European currency is moving into a consolidation phase within a 1.1225-1.1275 range. Should the mentioned support give up, the market focus will shift to the 1.1160 area. EURUSD is expected to stay on the defensive as long as it doesn’t exceed the 1.1330 resistance zone, followed by the 1.1375-1.1385 region. 

Later today, the pair could be also affected by the FOMC meeting minutes. However, it looks like the release won’t deter dollar bulls, with the greenback staying within a strong uptrend as the dominating risk-off conditions continue to boost the safe-haven dollar across the market. Meanwhile, rising coronavirus cases across Europe add to the selling pressure surrounding the common currency. 


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