The market focus shifts to Biden’s speech due on Tuesday
After outperforming its rivals last week, the dollar remains on the offensive on Monday, holding steady around fresh 2021 highs. The USD index has settled above the 96.00 figure as the 10-year US Treasury bond yield is holding above 1.5% following a decline witnessed on Friday. Of note, US stock index futures are posting modest gains, with investor sentiment in the European markets looking upbeat as investors shrug off coronavirus-related concerns.
The US currency received an extra boost ahead of the weekend when the Fed’s Clarida said that it may be appropriate in December to discuss accelerating the pace of asset purchase reductions. Now, the market focus shifts to Biden’s speech due on Tuesday. The US President will deliver comments on the economy and inflation and could push the buck even higher in the coming days.
Against this backdrop, EURUSD stays below the 1.1300 figure, holding marginally above fresh mid-2020 lows seen around 1.1250 on Friday. The technical picture suggests that there isn’t much relief on the way down for the common currency despite the oversold conditions. As such, the pair could threaten the 1.1200 figure in the short term if the dollar keeps climbing north. On the upside, the mentioned 1.1300 level represents the immediate target, but the path of least resistance for the European currency remains to the downside.
Elsewhere, the USDJPY pair bounced off the 20-DMA earlier on the day to regain the upside bias during the European hours. As a result, the dollar extended intraday gains to the 114.25 area before retreating marginally. In the near term, the prices need to hold above the 114.00 figure in order to avoid another retreat towards the 113.60 area. In a wider picture, the pair remains within a broader uptrend as long as the greenback stays above the ascending 20-week SMA, today at 111.50.