- EUR/USD benefits from weakness in USD, Treasury yields.
- Growing coronavirus cases and US stimulus doubts dent risk.
- Virus updates, USD dynamics to lead the way ahead of US CPI.
EUR/USD jumps back on the bids and looks to retest the 1.1350 level amid unabated broad-based US dollar selling, as we progress towards the European opening bells, having stalled its corrective slide at 1.1275.
The overnight sell-off in the spot lost legs, as the bulls fought back control in Asia alongside the risk-off trades, in light of growing coronavirus cases worldwide and the US economic response disappointment.
Therefore, investors ramp up the US bond-buying that led to the renewed sell-off in the Treasury yields that ensued the dollar slide across the board. The US dollar index now trades 0.35% lower at session lows near 96.05 while the US benchmark 10-year Treasury yields are down nearly 11% at 0.675%.
On the EUR-side of the story, the risks of a recession in the Eurozone, particularly in Germany, remain high in the face of the infectious disease. Therefore, the European Central Bank (ECB) will likely resort to additional stimulus measures on Thursday to cushion the economic blow, which could very well hurt the shared currency, with the EUR/USD correction likely to resume.
In the meantime, the major will continue to watch out for the incoming virus updates and its impact on the risk sentiment and dollar trades ahead of the US CPI data due later today at 1230 GMT.
EUR/USD technical levels to watch
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