The dollar largely ignored the Fed minutes yesterday, and there were objective reasons for that.

At last month's meeting, most Federal Reserve officials emphasized that inflation risks outweighed concerns about the labor market, as President Donald Trump's tariff policy had led to growing divisions within the central bank's rate-setting committee. The minutes of the July FOMC meeting revealed a deepening divergence of opinions among committee members. While all agreed that the U.S. economy remained resilient, significant differences emerged over how best to manage inflation and support the labor market.

Many FOMC members voiced concern that inflation could prove more persistent than expected and that further action was needed to contain it. They argued that the risks of doing too little to curb inflation outweighed the risks of excessive monetary tightening. These members stressed that the Fed must remain vigilant to ensure inflation returns to its 2% target.

However, another group of FOMC members expressed concern about the potential impact of higher interest rates on the labor market. They argued that tighter monetary policy had already led to slower economic growth and rising unemployment. These members emphasized that the Fed should act cautiously and account for risks tied to excessive tightening. They noted that the labor market remained strong and needed time to adjust to higher rates.

It is worth noting that shortly after the meeting, in the days that followed, several more Fed members shifted their stance. Their more dovish tone added further confusion regarding the central bank's next steps.

Last month, policymakers left interest rates unchanged in the 4.25%–4.50% range, citing increased uncertainty about the outlook amid slowing economic activity during the first six months of Trump's presidency. At the time, the labor market was described as "resilient," though inflation was noted to remain "somewhat elevated."

Recent data showed the largest jump in wholesale inflation in three years, another sign that companies have begun raising prices to offset higher production costs. Immediately afterward, some Fed officials expressed concern that Trump's trade war would continue to put upward pressure on prices next year as well.

Perhaps Jerome Powell will shed light on the matter when he delivers his next address tomorrow at Jackson Hole. Many expect major shifts in his speech, which could alter the balance of power in the currency market.

As for the current technical picture in EUR/USD, buyers now need to push through 1.1660. Only then will a test of 1.1700 become possible. From there, the pair could climb toward 1.1730, though doing so without support from major players will be quite difficult. The ultimate upside target is the 1.1768 high. In case of a decline, I expect significant buyer activity around 1.1625. If no support appears there, it may be best to wait for a retest of the 1.1600 low or consider long positions from 1.1565.

As for GBP/USD, buyers need to overcome the nearest resistance at 1.3480. Only then will a move toward 1.3530 be possible, though breaking higher from that level will be quite difficult. The ultimate upside target lies at 1.3560. In case of a decline, the bears will try to regain control at 1.3440. If they succeed, a breakout of the range will deal a serious blow to the bulls' positions and push GBP/USD down to 1.3410, with prospects of reaching 1.3375.