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• EUR/USD Technical Analysis: EUR/USD breaking to daily highs at 1.1720 level

EUR/USD broke above the 1.1700 figure and is currently trading close to its daily high near 1.1716 after testing the 1.1720 resistance.

The 50 and 100-period simple moving averages are now trending up above the 200 SMA confirming the bullish bias. If EUR/USD manages to stay above 1.1700 that would be another bullish clue.

As EUR/USD is approaching the key 1.1730-1.1750 area some strong resistance is to be expected, however, there is no sign of a top just yet and nothing indicates that the bullish momentum is over.

• The EUR/USD continues trading within a narrowing wedge marked with black lines on the chart. The last encounter with the triangle's limits was to the upside, and the pair fell back to the middle. Other indicators are not that decisive either: Momentum is almost non-existent, the Relative Strength Index is balanced around 50 on the 4-hour chart, and the 50 and 200 Simple Moving Averages are hugging the pair.

According to technical analysis textbooks, a narrowing wedge eventually forces the currency pair to make a choice. And when that happens, the move is sharp, with the accumulated energy bursting.

1.1680 capped the EUR/USD in mid-July and holds the pair down today, at least for now. Further up, 1.1720 was a swing high in late July and also in mid-June. 1.1750limited the pair around mid-July and a second attempt to reach it failed. 1.1795 was the swing high in mid-July, and far above, 1.1850 capped the euro/dollar in mid-June.

On the downside, we find 1.1620 as last week's low, 1.1575 as the trough in the previous week and 1.1508 as the lowest level this year.

• The Federal Reserve is expected to keep interest rates unchanged on Wednesday but solid economic growth combined with rising inflation are likely keep it on track for another two hikes this year even as President Donald Trump has ramped up criticism of its push to raise rates.

The Fed will announce its decision on Wednesday at 2 p.m. EDT (1800 GMT). No press conference is scheduled and only minor changes are anticipated compared with the Fed’s June policy statement, which emphasized accelerating economic growth, strong business investment and rising inflation.

• The Bank of Japan took measures to make its massive stimulus program more flexible and pledged to keep interest rates low for the time being on Tuesday, reflecting its forecast that it would take time for inflation to hit its 2 percent target.

At a two-day rate review that ended on Tuesday, the BOJ decided to maintain its short-term interest rate target at minus 0.1 percent and a pledge to guide 10-year government bond yields around zero percent by a 7-2 vote.

But the bank said it would allow long-term rates to fluctuate depending on economic and price developments, and conduct its asset purchases more flexibly.

• The United States and Japan are making final arrangements to hold their first bilateral trade talks in Washington on Aug. 9, Japanese public broadcaster NHK reported on Tuesday.

U.S. President Donald Trump and Japanese Prime Minister Shinzo Abe agreed in April to set up a new framework to discuss “free, fair and reciprocal” trade that will be led by U.S. Trade Representative Robert Lighthizer and Japanese Economy Minister Toshimitsu Motegi.

• Japan’s jobless rate rose in June while the availability of jobs improved to the highest in more than four decades, figures from the Internal Affairs ministry showed on Tuesday.

The seasonally adjusted unemployment rate rose to 2.4 percent from 2.2 percent in June, and compared with economists’ median forecast of 2.3 percent.

The jobs-to-applicants ratio rose to 1.62 from 1.60 in June to reach the highest since January 1974. The median forecast was for 1.60.

• Japan pledged to reduce its controversial stocks of plutonium, the world’s biggest inventory of the highly toxic material held by a non-nuclear armed state, following pressure from the United States, China and other countries.

The government did not outline by how much and when it will cut the stockpiles of plutonium it holds. Japan shut down most of its reactors that can use the material as fuel after the Fukushima nuclear disaster of 2011.

• Growth in China’s manufacturing sector slowed more than expected in July, as the worsening trade dispute with Washington, bad weather and weaker domestic demand weighed on factory activity.

The official Purchasing Managers’ Index (PMI) released on Tuesday fell to 51.2 in July, from 51.5 in June and below the 51.3 in a Reuters poll of economists. It was also the lowest index reading since February but remained above the 50-point mark that separates growth from contraction for a 24th straight month.

ANZ Senior China Economist Betty Wang said while trade tensions were a factor in the moderation in growth, the ongoing deleveraging campaign and unfavorable weather were bigger drivers behind the slowdown.

• Growth in China’s services industry in July moderated for the first time in five months, an official survey showed on Tuesday, a sign activity is slowing in a major part of the world’s second largest economy.

The official non-manufacturing Purchasing Managers’ Index (PMI) fell to 54.0 from 55.0 in June, well above the 50-point mark that separates growth from contraction.

• North and South Korea held military talks to build trust on Tuesday, while the United States detected renewed activity at a North Korean missile factory, casting more suspicion over the North’s intentions.

The meeting, their second since June, held in the border village of Panmunjom in the demilitarized zone (DMZ), was designed to follow on from an inter-Korean summit in April at which leaders of the two Koreas agreed to defuse tensions and halt “all hostile acts.”

• Oil prices fell on Tuesday, with Brent futures set for their biggest monthly loss in two years, as oversupply concerns rose after a Reuters survey showed OPEC output rose in July to its highest for 2018.

September Brent crude futures fell 25 cents, or 0.3 percent, to $74.72 a barrel by 0654 GMT after rising nearly 1 percent on Monday. The September contract expires later on Tuesday and the more-active October contract was down 0.3 percent at $75.35.

U.S. West Texas Intermediate crude futures (WTI) were down 24 cents, or 0.3 percent, at $69.88 a barrel, after rising more than 2 percent in the previous session.

The Reuters survey showed OPEC increased production 70,000 barrels per day (bpd) to 32.64 million bpd in July, the most this year.