EUR/USD pair is on a second intra-day low and fallen to this year new level. The reason behind could be the Greenback strengthening among cautious investors despite receding demand for safe-haven assets. Government bonds fell, pushing yields to the upper end of their weekly range.

Yesterday the FOMC released the Minutes of its latest meeting. The document showed that some participants suggested that it would be prudent for the committee to prepare for starting to reduce its pace of asset purchases relatively soon. Meanwhile yesterday itself EU confirmed July annual inflation at 2.2%, as previously estimated. As for the US, the country published July Building Permits and Housing Starts, which printed at 2.6% and -7%, respectively. On Thursday, the EU will publish June Current Account, while the US will release weekly unemployment claims.

Whereas in Europe, the first group of 19 Afghan refugees landed in Germany on Wednesday, the line was making the rounds in Chancellor Angela Merkel’s conservative party: “2015 mustn’t be repeated.” The fall of Afghanistan to the Taliban has sent thousands of panicked Afghans scrambling to flee the country. Many of them in Europe panicked and European politicians who are terrified of another mass movement of Muslim asylum seekers. They worry that new migrants will fan the embers of the far-right and populist movements that reshaped politics after a wave of asylum seekers from the wars in Syria and Iraq made their way to Europe in 2015. Support for anti-immigrant parties has since fallen, along with migrant numbers. But with important elections looming in Germany and France, the line being drawn by European leaders is early and firm. Afghans are facing a compassion deficit in Europe that may be insurmountable.

Greek Migration Minister Notis Mitarachi said on Tuesday that his country could not become the entry point into the European Union for Afghans fleeing the escalating conflict in their homeland. Greece was on the frontline of Europe’s migration crisis in 2015, when nearly a million people fleeing conflict in Syria, Iraq and Afghanistan landed on its islands, and like other EU member states, it is nervous that developments in Afghanistan could trigger a replay of that crisis.

While having a look on U.S. Dollar the Federal Reserve policy makers mostly agreed that a stimulus taper would start this year. The July FOMC statement was notable for its acknowledgement that “progress has been made” towards achieving the Federal Reserve’s maximum employment and price stability goals.  Fed officials saw the potential to ease bond-buying stimulus this year if the economy continues to improve as expected, although the condition of “substantial further progress” toward maximum employment had not yet been met.

“The July employment report was very strong with payrolls adding more than a million jobs when revisions are included, the unemployment rate falling and wages picking up. We have also seen more evidence casting doubt of the “transitory” view surrounding inflation with pipeline price pressures still building, corporate pricing power on the rise and inflation expectations looking decidedly less well anchored at 2% than the Fed continues to lead us to believe”. At the same time reduction in debt purchases is typically positive for the dollar as it means the Fed will not be flooding the financial system with cash.

EUR/USD 4 Hour Chart:

Support: 1.1687 (S1), 1.1666 (S2), 1.1638 (S3).

Resistance: 1.1736 (R1), 1.1764 (R2), 1.1785 (R3).

Amidst this above catalysts U.S. dollar is on strongest prominence and it squeezes Euro into sluggish moment. We expect a bearish trend for EUR/USD.