The EUR/USD pair has been running in the range of 1.0000-1.0400 for more than a month.

Uncertainty is heightened by the lack of guidance from central bankers on both sides of the Atlantic.

Federal Reserve Chairman Jerome Powell and European Central Bank President Christine Lagarde abandoned their previous practice of telling investors about future intentions. And now market participants have to guess how the central banks will act.

No ECB and FOMC Governing Council meetings are scheduled for August. They will announce the next rate decision on September 8 and 21, respectively.

Thus, in the rest of August, the EUR/USD pair is likely to continue the positional struggle between bulls and bears, and the exit from the established range will occur in September.

On one side of the scale now are hopes for a slowdown in US interest rate hikes due to a possible recession or slowing inflation. On the other side of the scale are fears that an energy crisis in the eurozone, rising inflation and an ECB interest rate hike will send the eurozone into recession later this year or early 2023.

Fed funds futures quote a 60% chance of a 50 basis point hike and a 40% chance of a 75 basis point hike.

Powell's comments following the central bank's July rate hike were interpreted by some investors as hinting at a dovish turn.

Money markets now expect the Fed's rate hike to stall at 3.6% next March, followed by cuts of about 50 bps by the end of 2023.

Powell said last month that the US central bank could slow down its rate hike, and the minutes from the July FOMC meeting could send the same message, said Sophia Ng of MUFG Bank. This will confirm market participants in the opinion that in September the Fed will raise the rate by less than 75 basis points, the analyst notes.

ING analyst Padhraic Garvey pointed out that financial conditions in the United States are back to where they were in April, before the Fed raised rates by more than 200 basis points in total, causing the central bank to almost go back to square one.

"This should be canceled. Otherwise, the Fed has no other choice but to tighten policy," said Garvey.

"The question is whether the Fed is willing to use the minutes as a communication tool to counter the easing cycle in 2023. The rhetoric of the central bank after the July meeting suggests that this is likely to be the case, especially since Fed Fund futures suggest a rate cut from 3.60% to 3.20% in the second half of next year. A further retreat from this market pricing should help the dollar," ING said.

Last week, several Fed officials signaled that the central bank will continue to act decisively to fight inflation, helping the dollar climb back up.

The greenback has rebounded about 2% from last week's lowest level since the end of June at 104.60, but remains more than 2% below its 20-year high of 109.29 reached in mid-July.

Credit Suisse expects the resumption of the main upward trend in USD.

"We are waiting for the dollar to break above 107.43 to further reinforce our view that its recent pullback was corrective, only to retest our main resistance target at 109.25-110.25. A break in this area could lead to a break of the 2001 high at 121.02," the bank's strategists said.

"A close below 104.55 would signal a deeper but still corrective pullback with support at 103.67 and 101.62-101.30," they added.

The US dollar sustained a second consecutive negative national GDP reading in the second quarter, which usually means a recession, Scotiabank economists say. They believe that the greenback will remain stable amid a small number of alternatives until at least the end of the year."

Despite the fact that the US economy has fallen into a technical recession, investors continue to believe that the dollar has no real alternative, as the Fed continues to tighten monetary policy. We expect the USD to remain strong over the next few months," Scotiabank said.

The US dollar remains the most reliable asset, experts say, as disappointing Chinese data released this week heightened fears for the fate of the global economy.

The greenback remained stable in the middle of the week, and the EUR/USD pair continues to fluctuate in a relatively narrow range below 1.0200, changing within 50 points.

Market sentiment remains cautious ahead of the release of the minutes from the last FOMC meeting.

Given the intention of Fed officials to raise rates despite favorable inflation signals, a hawkish surprise cannot be ruled out. This can be perceived as a positive development for the dollar and negatively affect the EUR/USD pair.

On the other hand, the dovish tone of the minutes would mean that politicians see a 50 basis point rate hike in September as the most likely scenario. In this case, the main currency pair can get a bullish momentum.

However, the movement of EUR/USD to the upside is unlikely to be protracted.

The outlook for the eurozone economy is rapidly deteriorating and the economy appears to be heading into recession, analysts at Nordea say.

Scotiabank specialists point to the risks of the main currency pair falling below parity. In their opinion, negative growth surprises or interruptions in energy supplies to the EU can lead to this.

"The economic outlook for the eurozone remains in doubt given the risk that high energy prices will disrupt discretionary spending or, worse, reduce natural gas supplies from Russia. In the event of major disruptions in energy supplies, euro losses are likely to continue below parity. The only thing that plays in EUR's favor is that market participants are already aggressively shorting the single currency," Scotiabank said.

Strategists at Commerzbank also note that risks to the euro are downside.

"If the Purchasing Managers' Index reflects a sharp decline in the next releases, which increases the likelihood of a recession in the eurozone, the market could dump the euro quickly and send the EUR/USD pair below parity," they said.

The good news that Europe has tapped into global LNG supplies and is doing a better job of weaning off Russian gas is enough to provide a cushion for EUR/USD and make a break below 0.9500 less likely, Societe Generale said.

"However, the impact of higher prices on European growth is likely to see EUR/USD fall below parity for some time in the coming weeks," they said.

The initial support for the main currency pair is the level of 1.0150. If this mark turns into resistance, there could be additional losses towards 1.0100 and 1.0050.

Above 1.0200, resistance lies at 1.0230 (50-day moving average) and 1.0300 (50% Fibonacci retracement level).