EUR/USD extends the side-lined theme around the 1.2200 neighbourhood at the end of the week. EUR/USD now alternates gains with losses around the 1.2200 area after testing once again the key support in the 1.2170 region earlier in the session. The rangebound theme in spot follows the broader consolidation in the global markets against the backdrop of the pick-up in yields on both sides of the Atlantic. In fact, yields of the US 10-year note manage to surpass the 1.60% level, while yields of the German 10-year Bund rebound to -0.16%.

EUR/USD recorded new 4-month highs near 1.2270 earlier in the week before coming under some selling pressure to the 1.2200 neighbourhood. The move higher 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 gaining 0.03% at 1.2196 and faces the next hurdle at 1.2266 (monthly high May 25) followed by 1.2300 (round level) and finally 1.2349 (2021 high Jan.6). On the flip side, a break below 1.2051 (weekly low May 13) would target 1.1985 (monthly low May 5) en route to 1.1970 (200-day SMA).