EUR/USD snaps four-day winning run, remains vulnerable to risk reset
- EUR/USD posted losses on Wednesday amid risk-on action in the US equities.
- Asian equities are pointing to sustained risk reset.
- The focus would shift to the US labor market data during the North American trading hours.
EUR/USD fell by 0.32% on Wednesday, ending the four-day winning streak and could suffer losses for the second day if the risk recovery in the financial markets gathers steam.
Risk reset hurts EUR
Having put on a good show during last week's risk aversion, the common currency faced selling pressure on Wednesday, as the US stock markets rallied after the US House of Representatives authorized nearly $8 billion for virus prevention.
The S&P 500 closed 4.22% higher on Wednesday and the 10-year treasury yield rose from 0.98% to 1.06%.
The ISM non-manufacturing index reported robust growth in February, adding to the bullish tone around the greenback.
If the risk-on action continues, the selling interest around the EUR will likely strengthen. At press time, major Asian indices like Japan's Nikkei, South Korea's Kospi, Hong Kong's Hang and the Shanghai Composite index are reporting notable gains. The S&P 500 futures, however, are shedding 0.90%.
If the OPEC meeting fuels an oil price bounce, the risk sentiment will likely strengthen, pushing the EUR and other haven currencies lower. The pair is currently sidelined just below 1.1140.
Apart from the broader market sentiment, the pair may take cues from the US weekly jobless claims, Challenger Job Cuts data for February and the fourth quarter Unit Labor Costs figure scheduled for release during the North American trading hours. The European data docket is thin.
Technical levels