EUR/USD reverses the recent weakness and retakes 1.0900.Risk appetite shows some improvement on Tuesday.Finally, some respite for the European currency. In fact, the so far better mood in the risk complex lends support to the upside in EUR/USD to levels beyond the 1.0900 figure on turnaround Tuesday.EUR/USD still under pressure on geopolitics.EUR/USD prints decent gains and manages to leave behind six consecutive sessions with losses, as market participants appear to favour the risk-associated galaxy early in the European morning.
The better tone in the risk complex re-emerged in response to news citing the EU could be planning a massive joint bond sale to fund energy and defence spending against the backdrop of the current instability sparked in the wake of the Russian invasion of Ukraine.The daily recovery in the pair is also underpinned by the rebound in German 10y Bund yields back to the positive territory around 0.05%.
EUR/USD collapsed to levels last seen in May 2020 near the 1.0800 yardstick on Monday, just to regain some composure afterwards. The European currency is expected to remain under heavy pressure for as long as the Russia-Ukraine conflict lasts along with the persistent risk aversion, altogether bolstering the “flight-to-safety” environment. In the longer run, occasional strength in the pair should remain underpinned by speculation of a potential interest rate hike by the ECB probably sooner than many anticipate, higher German yields, persevering elevated inflation, the decent pace of the economic recovery and auspicious results from key fundamentals in the region.
Key events in the euro area this week: EMU Flash Q4 GDP (Tuesday) – ECB interest rate decision (Thursday) – Germany Final CPI.
EUR/USD levels to watch
So far, spot is gaining 0.40% at 1.0896 and faces the next up barrier at 1.1096 (10-day SMA) followed by 1.1293 (55-day SMA) and finally 1.1395 (weekly high Feb.16). On the other hand, a drop below 1.0805 (2022 low Mar.7) would target 1.0766 (monthly low May 7 2020) en route to 1.0727 (monthly low Apr. 24 2020).
EUR/USD recovers toward 1.0900 on improving sentiment.EUR/USD has regained its traction in the early European session and recovered toward 1.0900. A modest improvement in market mood seems to be helping the shared currency find demand. The EU is reportedly considering massive joint bond sales to fund energy end defence spending.
EUR/USD News ..GBP/USD holds near 1.3100 as greenback loses strength.The pressure surrounding GBP/USD seems to have eased off in the European trading hours on Tuesday with the pair holding near 1.3100. The dollar is struggling to preserve its strength amid a positive shift witnessed in risk perception.