The EUR/USD pair closed at 1.17169 after placing a high of 1.17736 and a low of 1.17114. EUR/USD extended its losses on Tuesday and reached its lowest since 5th November 2020 amid extended strength of the US dollar combined with coronavirus’s third wave effects in Europe. Despite better than expected economic data from Europe, the pair continued declining on Tuesday as the US dollar extended its strength, followed by a recent hike in US Treasury yields. The yields on the 10-year note rose to their highest level since January 2020 at 1.77% and added further strength to the greenback that reached above 93 level against other major currencies at 93.35 on Tuesday.

The fresh spike in US dollar and Treasury yields was driven by the Biden administration’s latest infrastructure investment proposal. On Wednesday, President Joe Biden is expected to call for around $3 trillion to $4 trillion spend in infrastructure and manufacturing sectors. The proposal has already been sent to Congress for review, and this has elevated the optimism that economic recovery will be faster than previously expected. The new infrastructure proposal and the $1.9 trillion stimulus package fueled the optimism around the economic recovery and added strength in the US dollar that weighed heavily on the EUR/USD pair prices.

On the data front, at 11:00 GMT, the German Import Prices for February rose to 1.7% against the expected 1.2% and supported single currency Euro but failed to reverse the pair. The German Prelim CPI remained flat at 0.5%. At 12:00 GMT, the Spanish Flash CPI for the year rose to 1.3% against the forecast 0.7% and supported the single currency Euro and capped further downside in EUR/USD.

At 18:00 GMT, the Housing Price Index for January dropped to 1.0% against the expected 1.2% and weighed on the US dollar that capped further losses in EUR/USD. The S&P/CS Composite-20 HPI for the year declined to 11.1% against the expected 11.4% and weighed on the US dollar and capped further downside momentum in the pair. At 19:00 GMT, the CB Consumer Confidence in March surged to 109.7 against the projected 96.9, supported the US dollar, and dragged the pair lower.

On the other side, the rising number of coronavirus cases due to the third wave of coronavirus and the slow vaccination campaigns in the euro region fueled economic recovery fears and weighed heavily on the single currency Euro. Many European nations have imposed fresh lockdown restrictions to control the spread of infections in the region that also weakened the single currency and added further losses in the EUR/USD pair.

Daily Technical Levels
Support Resistance
1.1749 1.1786
1.1736 1.1810
1.1712 1.1822
Pivot Point: 1.1773

The EUR/USD pair is trading with a bearish bias at 1.1711 level, having violated the support area of 1.1725 level. EUR/USD may find some support around the 1.1686 level. The bearish engulfing candle’s recent close is likely to drive selling trade in the pair. On the higher side, it is likely to face resistance at the 1.1725 level. Bullish bias can dominate over 1.1725, and bearish bias stays strong below 1.1725 level today. Good luck!