Early risk on tone allowed EUR/USD to...>

EURO-DOLLAR: Early risk on tone allowed EUR/USD to extend its recovery off

Friday's low of $1.1213 to $1.1353 in early Europe Tuesday. However, risk

appetite began to fade into NY and the resulting corrective pullback gained pace

as market reacted to reported increased COVID-19 cases in the US, as well as

Beijing raising its response level to level 2 due to recent outbreaks in areas

of the city. Comments from Fed Powell, appearing ahead of the Senate Banking

Committee, also acted to dampen risk enthusiasm as he noted some positive signs

but added significant uncertainty remains. This after US retail sales came in

much stronger than forecast, and a hoped for break through in virus treatment.

Downside correction pace fuelled as longs were squeezed, the rate pressed to

$1.1228 into the 1600BST fix before it picked up demand which edged it back to

$1.1273. Support $1.1228/27 ahead of $1.1213 and $1.1200. Resistance $1.1273/76,

$1.1290/1.1305.

- Fed Powell to appear again Wednesday before the House Financial Services

Panel. Fed Mester to speak on Fed's response to Covid-19. US Housing Starts and

Building Permits.