EUR/USD's fell to a marginal new 2021 low of 1.1701 on Wednesday, threatening the 38.2% Fibo of the entire 2020-21 pandemic rally at 1.16945 ahead of Fed meeting minutes.
The minutes are seen largely confirming the Fed's move toward tapering, but perhaps not more advanced rate hike talks that could cause further reversal of EUR/USD's pandemic uptrend toward key props by 1.1500.
So far, the 1.1700 figure has held because the market wouldn't be surprised if the minutes revealed tapering discussions, in light of comments since the meeting from various Fed officials favoring reducing asset purchases.
What could surprise the market and likely break EUR/USD's crucial supports would be many officials talking about rate hikes in 2022, rather than just the 7 out of 18 in June's dot plots nS0N2NL04I.
Because there's no risk of the ECB raising rates next year, a rapid Fed tapering and transition to rate hikes by H2 2022 could see EUR/USD down to the 50% Fibo of the pandemic rally at 1.1925 on EBS.
That's also the weekly cloud base and close to the March 2020 initial spike high.
Key resistance is Friday's 1.18045 high by 50% of the 1.1909-1.1701 drop, if minutes disappoint dollar bulls.
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