Yesterday, the euro and the British pound remained trading in narrow side channels even after the publication of the minutes of the US Federal Reserve, in which traders did not find clear guidance on the future of monetary policy.

The minutes indicate that the meeting participants generally noted increased bearish risks for the economy since the July meeting, but now there is a clearer picture regarding the continued weakness of investment, the decline in the manufacturing sector and exports, which allows us to build the right approach to monetary policy .

The main risks were still attributed to the uncertainty in international trade, which increased, as well as the prospects for global economic growth, which worsened amid geopolitical problems. Several participants in the meeting were also concerned about the weak prospects for business activity and investment by companies, which could lead to a slowdown in hiring in the future. However, there were also those leaders in the ranks of the Fed who opposed lowering rates because they did not think that risks to prospects undermined economic growth.

As for the split in the ranks of the Fed, it continued to intensify. Some Fed leaders suggested that a more substantial cut in rates would protect against continued economic weaknesses similar to those seen abroad, and emphasized the importance of tracking signs of worsening labor market conditions.

As for the report of the Fed economists, it focused on the continuing pressure from import duties, which continue to inhibit activity in the manufacturing sector. However, despite the fact that financial conditions for companies remain soft, the risks to the forecasts for US GDP growth are shifted downward, which may require additional measures to stimulate economic growth.

As for the risks of a sharp increase in inflation due to lower interest rates, few Fed leaders expect this scenario.

Yesterday, it was also announced that the Federal Reserve Bank of New York has made another liquidity injection in the amount of 30.8 billion US dollars through repo operations. This was done to eliminate problems with the lack of liquidity in the market of short-term debt. All the applications left by the banks were fulfilled.

As for the fundamental data, a report from the US Department of Commerce was released yesterday, which indicated that inventories in the US wholesale trade in August 2019 increased by 0.2% compared to the previous month. Economists had expected them to rise by 0.4%.

Yesterday's speech by the Fed chairman at an event in Kansas City was of a similar nature as the day before. On it, the head of the Fed repeated his statements, which he made on October 4.

As for the technical picture of the EURUSD pair, it is not much different from the one that was yesterday. The bulls have regained the middle of the channel and now tend to break above the upper limit of 1.1005. Only its breakdown will provide an influx of new major players, betting on the continued strengthening of risk assets to the highs in the area of 1.1040 and 1.1070. In the case of a downward correction, which may be formed after the publication of the European Central Bank's report from the September monetary policy meeting, the lower border of the current side channel in the area of 1.0950 will provide support.