EUR/USD weakens and re-visits 1.2200

• The pair gives away initial gains and challenges 1.2200.
• USD better bid approaches the key 91.00 handle.
• Risk trends, US yields to drive sentiment amidst empty docket.

The now better tone around the greenback is now forcing EUR/USD to recede to the area of daily lows and re-visit the critical 1.2200 neighbourhood.

EUR/USD looks to USD for direction

Following yesterday’s recovery, the pair has now resumed the downside after failing to extend the recent bullish attempt beyond the 1.2240 region on Tuesday.

In the meantime, the greenback – tracked by the US Dollar Index – keeps flirting with the critical 91.00 milestone while yields of the US 10-year note are looking to consolidate at/above the critical 3.0% level.

Nothing scheduled today in both Euroland and the US dockets, leaving all the attention to the broad risk appetite trends and market sentiment. That said, the pair is expected to remain under pressure/rangebound in light of imminent ECB meeting tomorrow.

EUR/USD levels to watch

At the moment, the pair is losing 0.17% at 1.2212 facing immediate contention at 1.2182 (low Apr.24) seconded by 1.2165 (low Jan.18) and finally 1.2153 (low Mar.1). On the upside, a break above 1.2245 (high Apr.24) would target 1.2307 (10-day sma) en route to 1.2414 (high Apr.17).