ECB Minutes Keep EURUSD Supported – US PMIs Next

ECB minutes Showing Hawkish Risks RemainAfter a choppy week, EURUSD is hovering around the week’s opening price as of writing. The latest ECB minutes released yesterday showed that the bank retains a willingness to tighten further if necessary, echoing comments we’ve heard from ECB members recently. ECB members agreed that they should remain vigilant around inflation risks moving forward and urged the need to avoid an unnecessary loosening of financial conditions. Essentially, the minutes showed the ECB pushing back against the growing market view that the bank is heading for rate cuts early next year.Market Calling ECB’s BluffLagarde was heard earlier this week warning that it was too early to declare victory on inflation, warning that further tightening might still be needed. However, with inflation down sharply at 2.6% last month from the peak of 10.6% last year, traders are betting that the ECB is done with tightening and headed for rate cuts early next year in line with a slowing economy.US Data DueLooking ahead, the next round of US PMI data due today will be key for EURUSD traders. Given the dovish Fed narrative which is enveloping markets, any fresh downside in today’s data should drive USD further lower, paving the way for higher prices in EURUSD.Technical ViewsEURUSDThe rally in EURUSD has stalled for now into a test of the 1.0937 level. Despite some initial selling, the dip found demand and price is now retesting the level. With momentum studies bullish, the focus is on a continuation higher and a breakout above the 1.0937 level targeting a move up to 1.1126 next. To the downside, 1.0785 remains the key support to note.