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  • EUR/USD pushes further north of the 1.19 level.
  • US yields fade the earlier move on discouraging US data.
  • US inflation figures failed to ignite extra upside in yields, dollar.

The single currency sees its momentum supported and lift EUR/USD back above the key barrier at 1.19 the figure on Wednesday.

EUR/USD bid after US CPI

EUR/USD gains extra momentum and surpass the 1.19 yardstick on the back of the renewed selling pressure around the greenback.

In fact, US yields receded and dragged the dollar from earlier peaks after inflation figures gauged by the CPI came in on the soft side during February. Indeed, the headline CPI rose 0.4% MoM and 1.7% YoY, while the Core CPI rose 0.2% on a monthly basis and 1.3% from a year earlier.

Investors, in the meantime, appear to be favouring further inflows into the risk complex for the time being, putting the buck under further downside pressure.

What to look for around EUR

EUR/USD recorded new 2021 lows in the vicinity of 1.1830 region on Tuesday, although it managed to stage a moderate rebound afterwards. The solid rebound in the greenback as of late put the previous constructive stance in the euro under heavy pressure, as market participants continue to adjust to higher US yields and the outperformance of the US economy. A move below the critical 200-day SMA (around 1.1815) should shift the pair’s outlook to bearish in the near-term. In the meantime, price action around EUR/USD is expected to exclusively gyrate around the dollar’s dynamics, developments from yields on both sides of the ocean, extra fiscal stimulus in the US and the global economic recovery.

Key events in Euroland this week: ECB interest rate decision/Press Conference/Economic Projections (Thursday) – EMU’s Industrial Production (Friday).

Eminent issues on the back boiler: EUR appreciation could trigger ECB verbal intervention, always amidst the current (and future) context of subdued inflation. Potential political effervescence around the EU Recovery Fund. Huge long positions in the speculative community.

EUR/USD levels to watch

At the moment, the index is gaining 0.14% at 1.1914 and a break above 1.1976 (50% Fibo of the November-January rally) would target 1.2032 (100-say SMA) en route to 1.2113 (monthly high Mar.3). On the other hand, immediate contention emerges at 1.1835 (2021 low Mar.9) seconded by 1.1820 (200-day SMA) and finally 1.1762 (78.6% Fibo of the November-January rally).