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  • EUR/USD attempts recovery as the USD bulls turn cautious.
  • Stimulus hopes-driven risk-on mood weighs on the greenback.
  • Next of note remains the German ZEW, Yellen’s hearings.

EUR/USD trades close to 1.2100, holding onto the recovery mode ahead of the European open. The recovery in the risk sentiment amid expectations of additional fiscal stimulus is weighing on the safe-haven US dollar.

US President-elect Joe Biden is set to take Office on January 20, pushing for the $1.9 trillion stimulus package already outlined last week.

Meanwhile, the Treasury Secretary nominee Janet Yellen is likely to urge the government to “act big” with its next coronavirus relief package when she testifies before the Senate later on Tuesday.    

Additionally, Eurozone finance ministers renewed push for fiscal support for their economies, in order to boost the post-pandemic recovery plans, also renders supportive for the riskier assets.

Looking ahead, the major will remain at the mercy of the US dollar dynamics and risk trends ahead of Yellen’s testimony. In the meantime, the German ZEW survey could keep the EUR traders somewhat busy.

EUR/USD technical levels

“Any further upside past-1.2100 needs to cross the falling wedge’s resistance line, at 1.2116 now, to recall the EUR/USD buyers eyeing to refresh the multi-month high above 1.2349. On the contrary, the quote’s U-turn from present levels will have strong support around 1.2045/40 area including the pattern’s lower line and December 02 trough,” FXStreet’s Analyst Anil Panchal notes.

EUR/USD additional levels