EUR/USD bulls stay firm and deny the bears of a downside extension

• EUR/USD bull stake control in Asia and follow Wall Street's lead.
• The markets will now be looking for US data for the day ahead in the run down to Xams. 

EUR/USD is solid on the day so far and the bulls have stepped in to defend the prospects of the downside extensions as they take on the 1.1290's in Tokyo trade. 

The euro was firm in the New York session as risk sentiment rallied and US stocks bounced in recovery from the start of the week's supply. The Omicron variant is sweeping its way through the world but governments are reluctant to go back to the dystopia style of lockdowns seen in March 2020. 

Wall Street recovered and the Dow Jones Industrial Average rose 1.5% to 35,441.21, the S&P 500 increased 1.6% to 4,639.79, and the Nasdaq Composite was up 2.2% to 15,304.73. The North American government bond markets continued to sell off and the 10-year US yields climbed 4.6bps. The DXY (-0.1%) weakened marginally while most other major FX markets strengthened against the dollar.

Late in the day, US President Joseph Biden addressed the nation at 2:30 pm ET and detailed further efforts to combat the rise of COVID-19 cases. There were no surprises in the speech as the White House had already suggested that lockdown measures are not being considered at this point. Biden confirmed this and encouraged everyone to get vaccinated as soon as possible. 

Besides the covid developments, traders will be looking to US data that will be eyed for the day ahead with the Gross Domestic Product revisions, Consumer Confidence, Existing Home Sales on tap. 

EUR/USD technical analysis

The market is trapped on the daily time frame and there is very little to be done at this point.