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Checking out EUR/USD for the session as traders pull back from the recent uptrend.

Will the upcoming FOMC meeting minutes bring back the bulls? Or is this an opportunity for the bears to jump in at great prices?

Intermarket Snapshot

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Fresh Market Headlines & Economic Data:

Trump Cancels China Talks, Raising Questions About Trade Deal

Trump Team Sees Path to Pared-Down $500 Billion Stimulus Deal

The Canadian Consumer Price Index (CPI) rose 0.1% on a year-over-year basis in July, down from a 0.7% increase in June. Excluding gasoline, the CPI rose 0.7%.

Canadian Wholesale sales continued to rebound in June, jumping 18.5% to $62.1B.

In June 2020 the current account of the euro area recorded a surplus of €21B, compared with a surplus of €11B in May 2020.

In July 2020, Annual inflation up to 0.4% in the euro area; Up to 0.9% in the EU

Euro zone bond yields fall; German 30-year tap sees “outstanding” demand

UK Annual consumer price inflation rose to 1.0% in July from 0.6% in June

The headline rate of output inflation for U.K. goods leaving the factory gate was negative 0.9% on the year to July 2020, unchanged from June 2020

UK House Price Index for April 2020: -0.2% m/m

UK hopeful of EU trade deal next month, says No 10

New Zealand Producer Price Index in the June: input PPI fell 1.0%, while the output PPI declined 0.3%

Japan July exports fall 19.2% year/year – MOF

Japan’s core machinery orders fall 7.6% in June

Upcoming Potential Catalysts on the Economic Calendar

FOMC meeting minutes at 6:00 pm GMT
Swiss Trade balance at 6:00 am GMT (Aug. 20)
German PPI at 6:00 am GMT (Aug. 20)
U.K. Industrial Order Expectations at 10:00 am GMT (Aug. 20)
Canadian ADP Non-Farm Employment Change at 12:30 am GMT (Aug. 20)
U.S. Philly Fed Manufacturing Index, Unemployment Claims at 12:30 am GMT (Aug. 20)

What to Watch: EUR/USD

EUR/USD 1-Hour Forex Chart
EUR/USD 1-Hour Forex Chart

On the one-hour chart above of EUR/USD, we can see the bulls have been in solid control for the past week, enough so to break above the previous swing resistance area at the 1.1900 major psychological level.

But today seems to have brought in some Dollar bulls, bringing the pair to retest the broken resistance area…is this an opportunity for the bulls or is this the start of a bear move lower?

Well, broad risk sentiment is on the upswing (which not great for the Greenback) and the upcoming FOMC meeting minutes aren’t likely to signal any kind of pullback on stimulus

So the odds remain in favor of the bulls and this pullback may draw in EUR/USD buyers, especially technical traders as this area is not only a major psychological level but also a Fibonacci retracement area as well.

We can also see Stochastic nearing short-term oversold conditions, which could raise the technical argument for buyers to hop back in.

For the bears on this pair, look out in the FOMC meeting minutes for the rhetoric of pulling back on stimulus, especially any commentary related to inflation; inflation has picked up in the U.S. so we may see a reaction in that scenario. In that scenario (likely combined with some broad risk-off behavior), a break / retest / bearish patterns at 1.1900 is the technical behavior to watch out for before considering a short position.

The bearish argument rises if broad risk sentiment starts to move negative, a scenario that could play out if U.S. stimulus talks continue to disappoint.