The overall sentiment around the USD remains , and the currency’s positions are still fragile. For now, demand for the greenback is fuelled on the back of global equities plunge, as well as rising 10-year Treasury yields which may soon reach the 3% threshold. These are the key local factors preventing EURUSD from resuming the steady ascend, while the euro area fundamentals continue to support the EUR’s underlying .
Therefore, as soon as panic in the world stock exchanges fades away, the pair will focus on the prospect for a more aggressive ECB tightening and will resume the dominant upside bias as Fed’s three hikes this year are already fully priced in. But the problem is that the global sell-off could continue for some time, may be until late this month, before a steady recovery takes place. So in the short-term, the EURUSD pair will likely continue to feel pressure from the greenback. At this stage, the price needs to hold above the 1.22 mark in order to avoid another sell-off.