In today's London market, EUR/USD is likely to fluctuate between cautious trading and market expectations ahead of the release of the ECB Governing Council minutes. With a speech by the Fed Chair tomorrow also in focus, a wait-and-see stance may strengthen.
In today's London market, attention is expected to build around EUR/USD ahead of the release of the ECB Governing Council minutes, with a wait-and-see stance likely to spread gradually. Trading may also be cautious as markets await a speech by the Fed Chair.
When the ECB minutes are released, policy rates are expected to remain unchanged, but with uncertainty high and the inflationary impact of the energy shock still unclear, the minutes may leave the door open to a September rate hike. Attention will also focus on the content of President Lagarde's press conference.
Germany's ZEW Economic Sentiment and IFO Business Climate indices may exceed expectations, which could provide support for the euro. With a September rate hike almost fully priced into the interest rate futures market, further euro buying may emerge if the minutes lean hawkish.
From a technical perspective, the area around $1.1630 is seen as a pivot for EUR/USD. A break below it could provide a basis for further downside, while support there could prompt buying to return. The broader market is expected to remain cautious while also monitoring oil prices.