EUR/USD snaps two-day uptrend below 1.1950 as US dollar licks its wounds

• EUR/USD drops for the first time in three days, takes offer around intraday low.
• US dollar consolidates losses amid fresh geopolitical fears concerning China, light calendar.
• Uncertainty over stimulus, covid woes also favor the greenback.
• PMIs will be the key amid hopes of economic recovery that doesn’t challenge the Fed’s easy money policies.

EUR/USD refreshes intraday low to 1.1922, down 0.14% on a day, during early Wednesday. In doing so, the major currency pair portrays the US dollar bounce amid a quiet Asian session.

Behind the moves could be the latest geopolitical and trade tensions between the US and China. While Beijing’s failures to import previously agreed American goods downplay the odds of a phase one deal, the US warships in the Taiwan Strait get harshly criticized by the dragon nation’s army.

Also on the negative side could be the fears of the Delta Plus variant of the virus and looming uncertainty over US President Joe Biden’s Infrastructure and spending plan.

It’s worth noting that global markets earlier cheered Fed Chairman Jerome Powell’s rejection of the tapering and rate hike needs. The same joined mixed US data to drag the US dollar and favor the EUR/USD during the last two days.

Even so, S&P 500 Futures remain mildly bid whereas the US 10-year Treasury yields trim initial losses while taking rounds to 1.46%.

Moving on, preliminary readings of the US PMIs for June will be the key for EUR/USD traders going forward. Considering the downbeat forecasts, the latest Fedspeak and the upcoming one, the pair bears may have a rocky session going forward.

Technical analysis

With a clear U-turn from 200-day EMA, backed by bearish MACD, EUR/USD signals further losses towards the 10-week low near 1.1850.