Forex Today: Markets remain tentative following Monday's choppy action

Here is what you need to know on Tuesday, March 21:

Market participants refrain from committing to large positions early Tuesday following Monday's chaotic action. ZEW Survey for the Euro area and Germany will be featured in the European economic docket. Later in the day, Statistics Canada will publish inflation figures. Finally, Existing Home Sales from the US will be looked upon for fresh impetus in the early American session.

Risk flows dominated the market action at the beginning of the week but the sharp decline witnessed in the global bond yields in the European session caused investors to take a step back. Nevertheless, Wall Street's main indexes managed to close in positive territory on Monday and the 10-year US Treasury bond yield recovered back above 3.4%. Meanwhile, the US Dollar struggled to stay resilient against its rivals. 

Early Tuesday, the US Dollar Index holds steady slightly below 103.50 and the 10-year US T-bond yield fluctuates between 3.4% and 3.5%. US stock index futures are up around 0.2%, reflecting a slight improvement in risk sentiment.

EUR/USD took advantage of the broad-based US Dollar weakness and closed above 1.0700. The pair stays in a consolidation phase near Monday's closing level. "We are very confident that capital and liquidity positions of the Euro area banks are well in excess of requirements," European Central Bank (ECB) President Christine Lagarde said while testifying before the European Parliament's Committee on Economic and Monetary Affairs on Monday.

GBP/USD gained nearly 100 pips on Monday and registered its highest daily close since early February. The pair stages a technical correction early Tuesday and was last seen trading modestly lower on the day near 1.2250.

The Reserve Bank of Australia's policy meeting minutes revealed in the Asian session that policymakers agreed to reconsider the case for a pause, "recognizing that pausing would allow additional time to reassess the outlook for the economy." Although AUD/USD climbed to a daily high of 0.6720 with the initial reaction, it struggled to preserve its bullish momentum. As of writing, the pair was trading near 0.6700.

The Consumer Price Index (CPI) in Canada is expected to decline to 5.4% on a yearly basis in February from 5.9% in January. On Monday, recovering crude oil prices helped the commodity-sensitive loonie find demand and USD/CAD closed in negative territory below 1.3700. The pair consolidates Monday's losses and stays slightly below 1.3700 early Tuesday.

Gold price lost its traction after having climbed to fresh multi-month highs above $2,000 on Monday and ended the day deep in the red. XAU/USD struggles to stage a rebound in the European morning and fluctuates below $1,980.

Following last week's impressive rally, Bitcoin corrected lower and closed below $28,000. As of writing, BTC/USD was down nearly 1% on the day at around $27,600. Ethereum fell nearly 3% on Monday and continues to edge lower toward $1,700 early Tuesday.