EUR/USD APPROACHES 1.0850 AS USD’S UPSIDE IMPULSE FADES DESPITE EASING DOVISH FED BETS

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EUR/USD is looking to stretch its recovery towards the immediate resistance of 1.0850 in the early European session. The major currency pair rebounded from 1.0830 as US Dollar Index (DXY) retreated amid positive market sentiment. A volatile action is highly expected from the shared currency pair ahead of the German Harmonized Index of Consumer Prices (HICP) data.  

S&P500 futures have recovered their entire losses posted in the Asian session and have turned positive as investors are cheering receding fears of United States banking jitters. Acquisition of collapsed Silicon Valley Bank’s (SVB) deposits and advances and now discussion over increasing insurance limits for deposits have infused immense confidence in investors that US authorities are taking care of the overall financial system.

The demand for US government bonds is easing further amid anticipation of one more interest rate hike by Fed chair Jerome Powell and ebbing banking turmoil fears, which have raised 10-year US Treasury yields further to 3.59%.

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