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  • EUR/USD reverses a part of Monday’s recovery rally.
  • USD bounces amid US stimulus passage, new covid strain woes.
  • All eyes remain on the virus updates, US final GDP data.

EUR/USD retreats towards 1.2200 ahead of the European open, having failed to find acceptance once again above the 1.2250 barrier.

The pullback in the main currency pair can be mainly attributed to the resurgent haven demand for the US dollar against its key rivals, as markets fret over the new covid strain found in the UK and its impact on the global economic recovery.

The US dollar index bounced-off the 90.00 support area, now trading around 90.25, up 0.24% on a daily basis. Meanwhile, the spot trades near-daily lows of 1.2218, down 0.19% on the day, as of writing.

The dollar’s recovery outweighs the fresh gains in the EUR/GBP cross, fuelled by the latest leg down in GBP/USD, as virus and Brexit concerns continue to overwhelm the pound traders.

Further, the dollar bulls cheer the passage of the USD900 billion covid relief stimulus package and government funding bill in the US Congress, as they await the US final GDP figures for fresh impetus.

Next of relevance for the spot remains Germany’s January GFK Consumer Confidence survey, foreseen at -9.5. Meanwhile, the broader markets sentiment, dollar trades and virus updates will continue to dominate.

EUR/USD technical levels