EUR/USD remains pressured toward 1.2100 amid USD strength

Persisting buying opportunities in the US dollar drag EUR/USD back towards 1.2100 ahead of the European open. The pair extended the previous day’s decline and refreshed daily lows near 1.2120.

At the time of writing, the EUR/USD is trading at 1.2127, down 0.16% on the day.

The US dollar index (USD), which tracks the greenback movement against major markets, touched multi-day high at 90.32, with 0.22% gains. US Treasury yields are marginally higher at 1.62%.  The pair came under pressure on the sudden revival of the US dollar demand.

The move is primarily sponsored by the escalation of Middle-East tensions that prompts investors to ply for the US dollar on its safe haven appeal. 

In addition to that, the concerns over inflation mounted amid rising commodity prices and supply chain issues, which could lead the Fed to tighten the policy sooner-than-expected. US economic data on Monday revealed US inflation expectations surged to their highest in a decade. 

On the other hand, the euro kept a muted tone on mixed Eurozone data on Tuesday. German’s ZEW Economic Sentiment rose to 84.4 from 70.7 beating the market expectations at 72. For the Eurozone, the Economic sentiment Index edged higher at 84.0 against the market consensus of 65.0. Italian Industrial Production fell by 0.1% in March against the market expectations of 0.4%.  

As for now, investors turn their attention to the release of the Eurozone Harmonized Index of Consumer Prices. However, the focus will be majorly on the US Consumer Price Index (CPI) data to gauge the market sentiment.

EUR/USD Additional Levels