EUR/USD sticks to gains near daily high, bulls await a sustained move beyond 1.1300

The EUR/USD pair held on to its modest intraday gains heading into the North American session, with bulls now awaiting a sustained move beyond the 1.1300 round-figure mark.

The pair managed to regain some positive traction on Wednesday and built on the previous day's late rebound from a one-and-half-week low, around the 1.1230-25 region. An extension of the recent rally in the equity markets undermined the safe-haven US dollar and extended some support to the EUR/USD pair.

The global risk sentiment remained well supported by easing fears about the potential economic fallout from the new Omicron variant of the coronavirus. The upbeat market mood got an additional boost after Pfizer said the third dose of their COVID-19 vaccine neutralized the Omicron variant in lab tests.

The shared currency further benefitted from some cross-driven strength stemming from a sharp spike in the EUR/GBP cross, triggered by reports about the imposition of fresh COVID-19 restrictions in the UK. That said, hawkish Fed expectations helped limit the USD losses and capped gains for the EUR/USD pair.

Investors seem convinced that the Fed would tighten its monetary policy sooner rather than later to contain stubbornly high inflation. In fact, the money markets have been pricing in the possibility of an eventual liftoff in May 2022, which should continue to act as a tailwind for the greenback.

The focus now shifts to Friday's release of the US consumer inflation figures, which would influence the Fed's decision to taper its stimulus at a faster pace and set the stage for an interest rate hike. This will drive the USD demand and provide a fresh directional impetus to the EUR/USD pair.

This makes it prudent to wait for a sustained strength beyond the 1.1300 mark before placing fresh bullish bets around the EUR/USD pair. In the absence of any relevant market-moving economic releases, developments surrounding the coronavirus saga will be looked upon for some trading opportunities.

Technical levels to watch