EUR/USD feels the pull of gravity amid risk reset, ahead of Eurozone PMIs
- EUR/USD is losing altitude amid risk reset in the financial markets.
- Coronavirus scare has eased with China's decision to inject liquidity.
- All eyes remain on Eurozone data, ECB Lagarde’s speech and US PMIs.
Amid risk reset, the EUR/USD pair is currently trading near 1.1034, down 0.10% on the day, having faced rejection near 1.11 on Monday.
Risk rebound
Global equities picked up a strong bid on Tuesday as China's $174 billion liquidity injection eased fears about the negative effects of the coronavirus outbreak on both the Chinese and the global economy.
Notably, the S&P 500 index rose more than 1.5% and the Nasdaq Composite Index printed a record close. The US 10-year yield also rallied from 1.52% to 1.61%, strengthening the bid tone around the US dollar.
The Asian stocks also eked out solid gains on Wednesday. Also, oil benchmarks are reporting a 1 percent gain at press time.
With risk sentiment strengthening, the treasury yields are likely to extend Tuesday's gains. EUR/USD, therefore, risks falling to 1.10. However, the downside pressures may weaken if the German PMI numbers and Eurozone Retail Sales beat expectations by a big margin.
Across the pond, ADP Employment Change (Jan) will take center stage along with the trade balance figure.
Technical bias
"The risk is skewed to the downside, but the pair would need to break below 1.1020 to increase its bearish potential," according to FXStreet's Valeria Bednarik.
Technical levels
Author
Omkar Godbole
FXStreet Contributor
Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.
