EUR/USD battles 1.2100 on road to recovery ahead of ECB

• EUR/USD regains poise as DXY slips amid mixed markets.
• Vaccine, stimulus hopes counter Brexit woes, dovish ECB expectations.
• US vaccine approval, economic data next of relevance.

EUR/USD turns positive for the first time this week, as the bulls look to extend control above 1.2100 in the run-up to the ECB monetary policy decision.

Markets are a bit jittery amid a no breakthrough in the UK-EU high-level Brexit talks while the US dollar remains on the defensive amid optimism over additional fiscal stimulus after the House Lawmakers voted to pass the stop-gap funding bill.

Meanwhile, the haven-demand for the greenback also takes a hit amid expectations that the US drug regulator, the Food and Drug Administration (FDA), will approve Pfizer’s coronavirus vaccine later this Thursday.

On the EUR-side of the story, the euro bulls continue to draw support from hopes that the EU leaders will approve the stimulus deal at the Summit, which will pave the way for the flow of $2.2 trillion to the continent’s battered economies.

This comes after “Poland and Hungary lifted their veto over a landmark EU stimulus package in exchange for a delay in a sanctioning process that could strip them of access to the funds,” Bloomberg reports.

Further, markets resort to repositioning ahead of the crucial ECB policy decision, although the stimulus boost by the central bank is already priced-in by the markets. The ECB’s economic projections and President Christine Lagarde’s take on the appreciation of the euro could likely be the main market drivers.

Next of note also remains the US CPI and Jobless Claims data while the vaccine updates will also have a significant impact on the market sentiment, eventually impacting the dollar trades.

EUR/USD technical levels