EUR/USD recovery remains fragile towards 1.1750 despite softer USD

EUR/USD attempts recovery on Tuesday after the previous day’s fallout.
US Dollar Index pares initial gains, still remains elevated above 93.00.
Indebted China’s Evergrande fears, pre-Fed anxiety persists.

EUR/USD trades mildly higher in the Asian session on Tuesday amid cautious optimism. The pair remained mostly consolidated at the beginning of the day before comprising a sudden uptick during the trading session and touched an intraday high of 1.1740.

At the time of writing, the EUR/USD is trading at 1.1734, up 0.08% for the day.

The US Dollar Index (DXY), which tracks the performance of the greenback against the six majors, subsided from the initial higher levels to trade near 92.30 following the US House Speaker Pelosi comments.

In the latest development, the US House Speaker Nancy Pelosi said she hopes for a $3.5 trillion infrastructure bill but remained prepared for any adjustment. The prospects of House and Senate passage of the bill this week remained bleak over the disagreement among Democrats in both houses. 

An uptick in the US 10-year benchmark yields at 1.32% limits the downside in the greenback, as investors digest China’s property giant Evergrande default risks and FOMC meeting anxiety. 

Meanwhile, Fed Chairman Jerome Powell is expected to pull back stimulus in the two-day FOMC meeting on Wednesday by reducing monthly bond purchases while keeping in mind that it should not be considered as a signal to a sooner rate hike.

It is worth noting that, S&P 500 futures are trading at 4,361, up 0.30% for the day.

Investors turn their attention to US Current Account data, Housing Start, and Building Permits to take fresh trade insight, as the EUR docket remains dry. 

EUR/USD levels to watch