Solid housing data published as well, which helped quash expectations the Fed will stimulate the U.S. economy with dollar-weakening easing tools.
In U.S. trading on Wednesday, EUR/USD was trading down 0.27% at 1.2532, up from a low of 1.2519 and off from a high of 1.2573.
The pair was likely to find support at 1.2466, Tuesday’s low, and resistance at 1.2576, Tuesday's high.
The government revised its second-quarter growth estimate up two percentage points to 1.7% from 1.5%, which watered down talk the Federal Reserve will roll out a new round of quantitative easing.
Under quantitative easing, the Fed buys assets from banks such as Treasury holdings or mortgage-backed securities, pumping the economy full of fresh liquidity to drive down borrowing costs and spur recovery, weakening the dollar in the process.
Housing data surprised on the upside as well, further convincing markets that the Fed may decide the economy can stand on its own two feet.
The National Association of Realtors said its index of pending home sales index rose 2.4% in July, far outpacing expectations for a 1.0% increase.
Year-on-year, pending home sales rose 15.0% in July, beating out market calls for an 11.1% increase, after rising by 8.4% in June.
The data came a day in the footsteps of bullish home pricing data.
The Standard & Poor's/Case-Shiller home price index released Tuesday showed a gain of 0.5% from June 2011, the first annual increase since 2010.
Analysts were expecting the figure to contract 0.1%.
The euro saw support, however, amid ongoing hopes the European Central Bank and other entities will craft a bond-buying program to lower borrowing costs in countries like Spain and Italy, though obstacles still remain, namely opposition among German policymakers.
The euro, meanwhile, was down against the pound and down slightly against the yen, with EUR/GBP down 0.40% at 0.7910, and EUR/JPY trading down 0.01% at 98.63.
EUR/USD is gently offered as it consolidates around the 100-day EMA (1.2525) in early Asia. Market participants are mostly sidelined ahead of the Jackson Hole summit, and this quiet sideways action is expected to continue.
There has been a lot of demand for out-of-the-money 1-month calls so obviously the professional trading community sees plenty of upside potential,” “Any such moves won’t happen today in EUR/USD, with Fibo resistance, Sovereign sellers, and a sizeable option barrier all providing stiff resistance ahead of 1.2600.”
Looking at the higher timeframes, price continues to trade below the 21-week EMA (1.2591) and around Fibonacci resistance at 1.2506 (38.2%, 1.3283/1.2042). RSI looks to have room to trek higher, last valued at 45. On the monthly timeframe, RSI is turning higher from a period of stagnation, last at 41. A sustained break of the 1.2590 price zone, which is also confluent with the 200-month EMA, may trigger a round of bids and price may hold scope to run toward resistance around 1.3500 (50%, 1.4938/1.2042 decline).
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