EUR/USD advances towards 1.2100 as US dollar keeps falling

• EUR/USD regains 100-DMA on the way to 1.2100.
• US dollar loses further ground in Asia amid an upbeat mood.
• Euro cheers rising vaccination rates as economic optimism grows.

EUR/USD is extending the advance towards 1.2100, mainly driven by the ongoing decline in the US dollar and EU’s covid vaccine optimism.  

After a brief consolidative stint, the US dollar resumes its declines across the board heading towards the European session, as the risk-on market mood dims the greenback’s safe-haven appeal.

The US dollar index refreshes seven-week lows at 90.88, losing 0.18% on the day. The uptick in the US Treasury yields fails to defy the dollar bears, as the broader market sentiment leads the way.

Boosting the appetite for riskier assets and the single currency is the growing economic optimism, induced by rising vaccination rates in the Old Continent.

The EU will secure additional 50 million Pfizer/BioNTech doses while the J&J vaccine issue could be resolved shortly, which could help ramp up the vaccine supplies.

Expectations of a faster Eurozone’s economic recovery amid the vaccine optimism is reflective of the rise in the German bund yields, offering additional support to the euro.

Markets now await the ECB monetary policy decision for fresh trading opportunities in the spot. In the meantime, the dynamics in the dollar and vaccine updates will continue to influence the major.

EUR/USD technical levels

FXStreet’s Analyst Anil Panchal notes, “100-day SMA around 1.2060 tests the major currency pair’s latest run-up, a break of which will highlight March’s top of 1.2133 and late January peak surrounding 1.2190 for the EUR/USD bulls. Alternatively, pullback moves below the immediate support line, previous resistance, surrounding 1.2015 will recall the mid-March tops near 1.1990 to the chart.”

EUR/USD additional levels