EUR/USD stalls ahead of Fed Minutes and major US Treasury auction

• EUR/USD edges lower as traders await clues of when the Fed may cut rates.
• Minutes from the June FOMC and changes in rate expectations could serve as an additional catalyst for EUR/USD.
• Euro strength wanes as bullish momentum of the EUR/USD uptrend fades.

The Euro (EUR) is trading flat against the US Dollar (USD) on Wednesday as investors turn cautious ahead of key US economic events.

As markets continue to search for clues about when the Federal Reserve (Fed) may begin cutting rates, the Minutes from the June Meeting and a US Treasury bond auction are in focus.

Ahead of these events, EUR/USD remains in a narrow range with prices hovering above 1.1700 at the time of writing.

US 10-year bond auction and FOMC Meeting Minutes set tone for EUR/USD

The Federal Open Market Committee (FOMC) Meeting Minutes provide details about how Fed Board Members perceive the current economic conditions. It also provides insight into inflation and employment trends, which directly influence expectations for interest rates. As US President Donald Trump continues to call for the "immediate resignation" of Fed Chair Jerome Powell, markets are pricing in a rate cut for September. This has provided some support for US Treasury yields and the Greenback on Wednesday.

Additionally, the US Treasury's 10-year bond auction, scheduled for 17:00 GMT, is drawing considerable market interest.

A bond auction is a process where the US government issues new debt by selling bonds to investors, and its outcome can significantly influence bond yields.

Rising yields typically strengthen the US Dollar by making it more attractive to investors seeking higher returns, which can potentially impact currency pairs such as EUR/USD.

EUR/USD nears 1.1700 as bullish momentum fades

EUR/USD is currently trading above the 1.1700 psychological level after testing a new YTD high of 1.1803 last week. The 20-day Simple Moving Average (SMA) is providing support at 1.1651, just above the 23.6% Fibonacci retracement level of the May-July uptrend near 1.1650.

The Relative Strength Index (RSI) is hovering around 60, indicating that bullish momentum has waned, although the broader tone remains neutral to positive. Immediate resistance lies at the 10-day SMA of 1.1749, which could open the door for the 1.1800 psychological level and the recent swing high of 1.1830.

With support clustered around the 23.6% Fibo retracement and the 20-day SMA, a decisive break below this confluence could expose the pair to further downside toward the 38.2% Fib level at 1.1538.

On the flip side, a move back above 1.1749 would revive bullish momentum and open the door for a retest of the recent peak. Traders are likely to focus on the 1.1650 area for near-term directional cues.