EUR/USD Kept Under Pressure By Familiar Risks

EUR/USD is essentially flat into European dealing, last printing just below $1.1240, with a brief blip lower on broader USD strength seeing the rate trade as low as $1.1226 in Asia. The USD uptick witnessed overnight came as U.S. Tsy futures saw light pressure after Atlanta Fed President Bostic ('21 voter) became the latest Fed official to point to the scope for a faster tapering process. Still, the rate held to a sub-20 pip range in Asia-Pac hours. Be aware that the re-open of U.S. cash Tsys, at the top of the hour, may provide a catalyst for wider price action.

• Local COVID matters continue to dominate in Europe, with German Health Minister Spahn once again stressing that he is not willing to rule out any containment measures, including lockdowns, in comments made early on Tuesday.
• Our technical analyst notes that EUR/USD remains vulnerable and continues to trend lower. The recent weakness cements the downtrend and the rate is trading below the base of the bear channel drawn from the Jun 1 high. The next objective is $1.1222, a Fibonacci projection, ahead of the Jul 1 '20 low ($1.1185). Initial resistance is seen at the Nov 18 high ($1.1374).
• There isn't anything in the way of nearby notable FX option expiries at today's 10AM cut.
• Flash EZ PMI data headlines the European docket today, with downside risks presented by the well-documented economic slowdown in China. Note that the economic surprise index differential covering the Eurozone & the U.S. has provided a clear source of downward pressure for the rate in recent months. Elsewhere, ECB speak from de Guindos & Makhlouf will cross later in the day.