EUR/USD bulls await EU GDP, Fed Minutes with eyes on 1.0210 hurdle

• EUR/USD grinds higher around daily top, keeps Tuesday’s bounce off three-week low.
• Softer yields, hopes of firmer EU data favor corrective pullback.
• 21-DMA guards immediate upside amid impending bear cross on MACD.
• Fed Minutes need to confirm 0.75% rate hike for September and do more to keep bears hopeful.

EUR/USD remains mildly bid around the intraday high, keeping the previous day’s corrective pullback from a three-week low, as bulls and bears jostle ahead of the key data from Eurozone and the US. That said, the major currency pair seesaws around 1.080 heading into Wednesday’s European session.

The major currency pair’s latest strength could be linked to the US dollar’s weakness, as well as cautious optimism in the market. That said, the US Dollar Index (DXY) refreshed its three-week high before reversing from 106.94, down 0.10% near the intraday low of 106.35 at the latest. The DXY losses could be linked to the market’s preparations for today’s US Retail Sales for July, expected 0.1% versus 1.0% prior, as well as the Fed minutes.

“Investors now see a 41% chance of a third successive 75 bps rate hike at the Fed's next meeting in September, up from 39% the previous day. Minutes from the previous meeting will be released later today,” said Reuters ahead of the Fed Minutes.

Elsewhere, Europe’s signals to renew the nuclear deal with Iran, as well as pushing back plans for the closure of Germany’s last three nuclear power plants, also appeared to have favored the EUR/USD bulls of late. It’s worth noting that downbeat US housing numbers and mixed German ZEW figures seemed to have failed in directing short-term pair moves.

Amid these plays, US 10-year Treasury yields fade the previous day’s rebound while S&P 500 Futures seesaw near a four-month high.

Moving on, EUR/USD traders should pay close attention to the second readings of the Eurozone Gross Domestic Product (GDP), expected to confirm the 0.7% QoQ forecasts, ahead of preliminary readings of Eurozone Employment Change for the second quarter (Q2), expected 2.5% versus 2.9% prior.  Also crucial will be the US Retail Sales for July, expected 0.1% versus 1.0% prior. Above all, the Federal Open Market Committee (FOMC) meeting minutes will be crucial as markets renew hawkish bets on the Fed.

Also read: FOMC July Minutes Preview: Can it influence September Fed rate hike expectations?

Technical analysis

With the retreat of the MACD line, the impending bear cross of the EUR/USD pair teases the sellers even if the quote approaches the 21-DMA hurdle surrounding 1.0210. Also acting as an upside filter is the previous support line from mid-July, close to 1.0245.

Alternatively, the 1.0120 and 1.0100 mark could try to defend buyers before the EUR/USD bears aim for the fresh yearly low, currently around 0.9950.