- EUR/USD fades Tuesday's negative pullback and looks to 1.2200.
- Extra gains seen above the mid-1.2200s near-term.
The sluggish movement in the US dollar keeps EUR/USD on the higher side, with the moves comprising of a range below 1.2200. Subdued US dollar and Treasury yields help underpin the major, as the focus shifts to the ECB decision and US CPI data. Bulls regain the upper hand and push EUR/USD back to the vicinity of 1.2200 the figure on Wednesday.
A move above the weekly highs around 1.2200 should expose the short-term resistance line (off March lows) around 1.2260. This area is also coincident with monthly peaks (May 25). Above this region, the pair should resume the upside bias and target the 1.2300 yardstick. On the broader view, the constructive stance on EUR/USD is forecast to remain intact as long as it trades above the 1.21700 mark.
The ongoing correction follows the recent bearish divergence in the daily RSI, as it did not confirm the recent peaks near 1.2270.
