EUR/USD: In bearish consolidation phase around 1.1850 ahead of ECB minutes

• EUR/USD bears take a breather after Wednesday’s sell-off.
• Dollar holds onto post-FOMC minutes gains.
• US Jobless Claims and ECB minutes in focus.

EUR/USD pair looks to extend its downside consolidation phase around 1.1850 into Europe, as the bears take a breather after the over 100-pips Wednesday’s sell-off. The weakness in the US Treasury yields is seen capping the upside in the US dollar so far this Thursday.

The recent slump in the spot from near two-year highs of 1.1956 was mainly driven by a broad-based US dollar comeback. The greenback staged a solid recovery from 27-month lows amid speculative interests and strong bond auction.

Meanwhile, the dollar bulls received further boost from the FOMC July meeting’s minutes, which showed that the officials lacked support for the yield curve control, as one of the policy options.

On the EUR-side of the story, the spike in new coronavirus cases in Spain, Germany, France and Italy unnerved the EUR bulls. Growing fears over the second-wave of the virus across Europe could likely weigh on the shared currency.

The focus now shifts towards the US Jobless Claims, Philly Fed Manufacturing Survey and the European Central Bank (ECB) policy meeting’s minutes due later today for fresh trading directives.

EUR/USD Technical levels

“The bearish divergence (on the daily chart) suggests the bullish trend is running out of steam. As such, the spot could witness a notable pullback in the near term. The immediate support is seen at 1.1724 – the lower end of the daily chart sideways channel. A violation there would expose the former resistance-turned-support at 1.1495 (March high),” FXStreet’s Analyst Omkar Godbole explained.

EUR/USD Additional levels

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