EUR/USD catches fresh bids on notable USD supply, nears 1.2400

  • DXY slips in Asia.
  • Further upside in play?
  • All eyes on the US CPI.

The EUR/USD pair traded with sizeable gains in Asia, as the bulls aimed to regain the 1.24 handle amid a broadly weaker US dollar, with attention turning towards the US inflation data release.

The US dollar witnessed aggressive selling over the last hours after the USD/JPY pair tumbled on increased safe-haven demand for the Yen, as a fresh round of risk-aversion was triggered amid a sell-off in the higher-yielding assets such as the Asian equities and Treasury yields.

Meanwhile, the sentiment also remains underpinned by the Bloomberg headlines released overnight, citing that Fed's Powell's said in his prepared remarks to "remain alert to any financial stability risks".

Moreover, markets prefer to hold the Euro ahead of the Eurozone flash GDP estimate, in the wake of optimistic Eurozone growth outlook while the USD long positions are getting sold-off into expectations of a softer core CPI reading from the US docket due later on Thursday.

EUR/USD levels to watch

Valeria Bednarik, Chief Analyst at FXStreet, noted, “In the 4 hours chart, technical indicators hold within positive territory, but the upward strength is easing. The pair is well above its 20 and 200 SMAs but is finding a hard time to surpass the 100 SMA, a few pips above the current level. Anyway, the relevant resistance is the 1.2400 area, the one the pair needs to surpass to maintain the positive bias. Support levels: 1.2300 1.2260 1.2225. Resistance levels: 1.2400 1.2440 1.2480.”    

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