EUR/USD Forecast: Bears Eyeing A Break Below 1.17 Handle, FOMC Minutes In Focus

The EUR/USD pair retreated from an intraday high level of 1.1758 and touched a one-week low, in what could be termed as a lacklustre trading action on Tuesday. The German political turmoil continued exerting some downward pressure on the shared currency, albeit receding US Dollar demand helped the pair to bounce off lows.

The current Fed Chair Janet Yellen's comments on inflation, at an event at New York University, signalled that the Fed might refrain from raising interest rates too quickly and risk driving inflation higher, which remained stubbornly below the central bank’s 2% target. As a result, the yields on longer-dated Treasury bonds continued inching lower and the so-called flattening of the yield curve capped the greenback.

Hence, today's release of the FOMC meeting minutes would now be closely scrutinized for clues over the central bank's monetary policy outlook and eventually drive the buck in the near-term. Ahead of the key event risk, traders will confront the release of key US durable goods and would be looked upon for some short-term opportunities.

From a technical perspective, the pair remains poised to extend its downslide and the bearish bias would be reinforced once it decisively breaks through an important resistance break-point, now turned strong support, near the 1.1700-1.1690 region. Below the mentioned support, the pair is likely to accelerate the slide towards 1.1660-55 intermediate support en-route to the 1.1600 handle.

On the upside, any bullish moves above the 1.1755-60 immediate hurdle might get extended but now seems more likely to be capped near the 1.1800 handle.