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  • EUR/USD bounces off two-week low but fails to convince buyers.
  • Germany, Netherlands extend activity restrictions, EU Health Director-General Gallina tried to placate vaccine fears.
  • Market sentiment consolidates amid Fedspeak, geopolitical tension and pre-PMI caution.

EUR/USD takes rounds to 1.1850-45 after the recent bounce off 1.1836 during Wednesday’s Asian session. The currency major dropped to the two-week low earlier in Asia as the US dollar stays on the front foot around the monthly peak. However, a lack of major catalysts seems to offer immediate relief to the bears.

Germany’s extension of the coronavirus (COVID-19)-led lockdown measures to April preceded Netherlands stretching of activity measures. The same highlights the virus resurgence fears in the bloc. On the same line, vaccine shortage in the European Union (EU) couldn’t be ignored even as the EU Health Director-General Sandra Gallina said, “Q2 vaccine deliveries should see bloc hit 70% target by late summer.”

On the other hand, US President Joe Biden sounds optimistic over vaccine deliveries and jabbing target whereas the Fedspeak managed to offer extra strength to the US dollar index (DXY) amid risk-off mood. That said, the DXY is currently poking the four-month high, flashed earlier in March, while picking up bids near 92.40.

The West versus China and the ECB’s comparatively less strong position than the Fed also contribute to the EUR/USD weakness.

Against this backdrop, S&P 500 Futures struggle for a clear direction around 3,900 whereas the US 10-year Treasury yield stays on the south-run, down 3.1 basis points (bps) to 1.60%, by the press time.

Moving on, activity numbers from the bloc and the US Durable Goods Orders, not to forget Fed Chair Jerome Powell’s second testimony, should entertain the EUR/USD traders. However, major attention will be given to the virus and inflation headlines while keeping eyes on the US bond moves for fresh impulse.

Read:  US Durable Goods February Preview: Consumption to reflect labor market recovery

Technical analysis

A four-month low around 1.1835 becomes a tough nut to crack to EUR/USD sellers even if a clear break of 200-day SMA, at 1.1862 now, suggests the quote’s further downside.