EUR/USD tumbles, further 1.2200 on sight

• The pair remains on the defensive near the 1.2200 handle.
• US 10-year yields falter just below the key 3.0% level.
• US Existing Home Sales, Manufacturing PMI next on tap.

The buying pressure around the greenback stays well and sound at the beginning of the week, forcing EUR/USD to challenge the lower bound of the range in the 1.2230/20 band.

EUR/USD weaker ahead of data

The pair is prolonging the leg lower on Monday following an increasing bid tone surrounding the buck, which in turn remains well supported by the renewed and sharp pick up in US yields.

USD is picking up extra pace today in tandem with higher yields of the key US 10-year reference, which are testing multi-year peaks in the 3.0% neighbourhood.

EUR should remain under pressure at least in the near term horizon in light of ECB meeting scheduled for Thursday. Consensus among traders point to a somewhat dovish tone from the Council, while significant announcements, if any, appears to have been postponed to the June meeting, along with fresh forecasts/projections.

In the data space, preliminary PMIs in Euroland came in on the strong side in general, although traders paid little attention. Across the pond, Markit will publish its manufacturing gauge followed by March’s Existing Home Sales.

EUR/USD levels to watch

At the moment, the pair is losing 0.49% at 1.2228 facing immediate contention at 1.2214 (low Apr.6) seconded by 1.2165 (low Jan.18) and finally 1.2153 (low Mar.1). On the upside, a break above 1.2341 (10-day sma) would target 1.2414 (high Apr.17) en route to 1.2478 (high Mar.27).