- EUR/USD benefits from weakness in USD, Treasury yields.
- Growing coronavirus cases and US stimulus doubts dent risk.
- Virus updates, USD dynamics to lead the way ahead of US CPI.
EUR/USD jumps back on the bids and looks to retest the 1.1350 level amid unabated broad-based US dollar selling, as we progress towards the European opening bells, having stalled its corrective slide at 1.1275.
The overnight sell-off in the spot lost legs, as the bulls fought back control in Asia alongside the risk-off trades, in light of growing coronavirus cases worldwide and the US economic response disappointment.
Therefore, investors ramp up the US bond-buying that led to the renewed sell-off in the Treasury yields that ensued the dollar slide across the board. The US dollar index now trades 0.35% lower at session lows near 96.05 while the US benchmark 10-year Treasury yields are down nearly 11% at 0.675%.
On the EUR-side of the story, the risks of a recession in the Eurozone, particularly in Germany, remain high in the face of the infectious disease. Therefore, the European Central Bank (ECB) will likely resort to additional stimulus measures on Thursday to cushion the economic blow, which could very well hurt the shared currency, with the EUR/USD correction likely to resume.
In the meantime, the major will continue to watch out for the incoming virus updates and its impact on the risk sentiment and dollar trades ahead of the US CPI data due later today at 1230 GMT.
EUR/USD technical levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD defends 0.6600 after strong China's PMI, RBA in focus
AUD/USD is defending 0.6600 after China's Caixin General Services PMI beat estimates with 51.5 in November. Investors await the Reserve Bank of Australia policy decision on Tuesday. The RBA is set to hold the interest rate at 4.35% amid cooling inflation.
EUR/USD posts modest gains below the mid-1.0800, US ISM PMI eyed
The EUR/USD pair snaps the four-day losing steaks during the Asian trading hours on Tuesday. That being said, the renewed US Dollar lends some support to the pair. The major pair trades around 1.0840, gaining 0.05% for the day.
Gold hovers around $2,030, US Services PMI eyed
Gold edges lower to $2,030 during the early Asian session on Tuesday. Meanwhile, the US Dollar Index rose to 103.60 and the Treasury yields edge higher, with the 10-year yield recovering from 4.24% to 4.32%. XAU/USD price is trading around $2,030, up 0.12% on the day.
Nayib Bukele demands apologies as Bitcoin grows bigger than Visa, Tesla and Bank of America
Bitcoin price noted stellar growth this past year, rising by more than 150% and hitting $42,000 in the past 24 hours. This growth has made Bitcoin the tenth biggest asset in the entire world, imbuing confidence in BTC enthusiasts, including the president of El Salvador, which is evidenced by his recent tweet.
RBA Interest Rate Decision Preview: Hold expected as central bank could leave door ajar for more hikes ahead
The Reserve Bank of Australia is set to pause its tightening cycle once again, leaving the Official Cash Rate (OCR) unchanged at a 12-year high of 4.35% following the conclusion of its December monetary policy meeting on Tuesday. The decision will be announced at 03:30 GMT.