EUR/USD consolidates near multi-year highs amid a moderate risk appetite

• The Euro remains steady near over three-year highs against the US Dollar, supported by a moderate risk appetite.
• Weak US data and higher hopes of Fed interest rate cuts are weighing on the US Dollar.
• EUR/USD maintains its positive tone with resistance at 1.1630-1.1640 and 1.1700.

The EUR/USD is trading with marginal losses on Wednesday, but remains close to a multi-year high near 1.1640, last seen in November 2021, following a nearly 1.40% rally in the previous two days. A moderate appetite for risk continues to drive markets, despite the fragility of the ceasefire between Israel and Iran, and is keeping the safe-haven US Dollar (USD) on its back foot.

Oil prices have ticked up from Tuesday's lows butt remain well below the highs seen last week. Iran's Oil and Natural Gas facilities seem to have been little affected by the bombings, and Oil traffic through the strategic Strait of Hormuz does not seem under threat, at least for now. The relatively low Crude prices are an additional support to the Euro (EUR) as they ease inflationary pressures on the Eurozone economy.

In the US, on Tuesday, the Federal Reserve (Fed) Chairman Jerome Powell reiterated that the central bank is in no rush to cut interest rates at the Semiannual Monetary Policy Report to Congress. Pressure from US President Donald Trump and the growing dissension among Fed officials does not seem to have scratched Powell's hawkish stance.

The market, however, keeps betting on a rate cut in September, especially after the downbeat Consumer Confidence reading released on Tuesday. Increasing concerns about employment are limiting US consumers' purchasing decisions and increasing pressure on the central bank to adopt a less restrictive monetary policy.

Powell will testify again on Wednesday, but he is unlikely to change his views. The economic calendar is thin on Wednesday, with only US New Home sales data for May. News about Middle East developments will continue driving markets.