EUR/USD picks up from lows in a calm year-end session

EUR/USD returns to levels past 1.1750 after hitting lows at 1.1720
The minutes of the December Fed meeting provided some support for the US Dollar.
The pair has broken below trendline support, a negative sign.

EUR/USD has turned positive on the daily chart on Wednesday. The pair found support at 1.1720 during the European morning session, and is trading at levels right above 1.1750 heading into the US session opening. The US Dollar recovery has lost steam, with US Jobless Claims expected to add some spice to a dozy year-end trading session.

From a wider perspective, however, the common currency remains on track to a 14% yearly appreciation, boosted by the monetary policy divergence between the European Central Bank (ECB) and the Fed. Apart from that, US President Donald Trump’s erratic trade policies and the softening US economy have weighed heavily on the Greenback.

On Tuesday, the FOMC’s minutes confirmed the wide divergence among Fed policymakers. The monetary policy committee approved a 25 basis points rate cut by a lower margin than previously thought and conditioned further monetary policy easing to a steady decline of inflation, which casts doubts about the timing of the next interest rate cut. The US Dollar appreciated after the release of the minutes.

In the macroeconomic calendar, the release of the US Initial Jobless Claims will gather investors’ attention. Still, volumes are likely to remain at thin levels as most markets will be closed on Thursday amid the New Year festivities and with Japanese markets shut for the rest of the week.