EUR/USD now comes under extra selling pressure and gradually approaches the support at the 1.2200 neighbourhood. The selling pressure around the single currency now gathers steam and relegates EUR/USD to the lower end of the daily range just pips above the 1.2200 yardstick. Profit taking mood combines with the rebound in the greenback to drag spot lower, shedding further ground after recording new monthly tops in the 1.2265/70 band on turnaround Tuesday. The offered stance in the European currency also comes in response to the drop in yields of the German 10-year Bund to the -0.20% neighbourhood, all after climbing as high as the -0.07% area at some point during last week.

EUR/USD recorded new 4-month highs near 1.2270 on Tuesday. The move remains largely underpinned by the improved sentiment in the risk appetite and the persistent sell-off in the greenback amidst rising optimism on the recovery in the euro area, which appears in turn supported by the firmer pace of the vaccine rollout. So far, spot is losing 0.23% at 1.2220 and a break below 1.2051 (weekly low May 13) would target 1.1985 (monthly low May 5) en route to 1.1968 (200-day SMA). On the other hand, the next hurdle is located at 1.2266 (monthly high May 25) followed by 1.2300 (round level) and finally 1.2349 (2021 high Jan.6).