EUR/USD: Rebound remains capped below 1.2150 amid USD comeback
- EUR/USD is off the low but USD recovery limits the upside.
- ECB Villeroy’s comments, German virus woes weigh on the euro.
- Markets shrug-off vaccine progress amid Brexit and stimulus concerns.
EUR/USD is making minor recovery attempts from daily lows 1.2114 but the sellers continue to lurk near 1.2140 amid a broad-based US dollar comeback.
The greenback staged an impressive bounce across its main competitors, as the risk sentiment deteriorated further in European trading amid growing no-deal Brexit fears and fading prospects of additional US stimulus.
The major also ran into fresh offers after the European Central Bank (ECB) Governing Council member Francois Villeroy de Galhau said that the central bank remains vigilant about the euro exchange rate.
The spot gave back nearly 50-pips in early dealings, falling from multi-day highs of 1.2164 to reach daily lows of 1.2114 before recovering to near the 1.2135 region, where it now wavers.
Markets also remain wary amid growing coronavirus cases in Germany, with the government looking to extend the lockdown well beyond the current January 10 deadline.
Further, the euro traders digest the latest Reuters reports citing that the ECB President Christine Lagarde fought hard with the hawks for the stimulus expansion at its December policy meeting.
According to sources, Lagarde and the company reportedly debated EUR750 billion Pandemic Emergency Purchase Program (PEPP) expansion. On Thursday, the ECB ramped up the PEPP by EUR500 billion ($606 billion) to EUR1.85 trillion and extended it by nine months to at least the end of March 2022.
Attention now turns towards the US macro releases and sentiment on Wall Street, as investors shrug-off the optimism over the FDA’s recommendation of Pfizer’s coronavirus vaccine.
EUR/USD technical levels
Author
Dhwani Mehta
FXStreet
Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.
