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  • EUR/USD attracted some dip-buying near the 1.2130 region and pared intraday losses.
  • Fresh coronavirus jitters underpinned the safe-haven USD and might cap the upside.

The EUR/USD pair has managed to rebound around 70 pips from daily swing lows, with bulls making a fresh attempt to build on the momentum further beyond the 1.2200 mark.

The pair opened with a bearish gap on the first day of a new trading week and continued losing ground through the first half of the European session. The downward momentum dragged the EUR/USD pair away from over two-and-half-year tops set on Thursday and was exclusively sponsored by a broad-based US dollar strength.

The discovery of a new variant of the highly contagious coronavirus disease rattled global financial markets and largely offset the news that a deal had finally been struck on a long-awaited US stimulus bill. This, in turn, provided a strong boost to the safe-haven USD and exerted some heavy pressure on the EUR/USD pair.

Meanwhile, the anti-risk flow triggered a steep fall in the US Treasury bond yields and kept a lid on any further gains for the greenback. In fact, the key USD Index has now trimmed a part of its strong intraday gains to the 91.00 neighbourhood, which assisted the EUR/USD pair to attract some dip-buying near the 1.2130 region.

It, however, remains to be seen if bulls are able to capitalize on the move or the EUR/USD pair meets with some fresh supply at higher levels amid absent relevant market-moving economic releases from the US. That said, the near-term bias remains tilted in favour of bullish traders and supports prospects for additional gains.

Technical levels to watch