EUR/USD headed to 1.2450 amid risk-off?

• Regains 1.24 handle and beyond.
• Risk-off underpins.
• A light session ahead.

The EUR/USD pair staged a solid comeback so far this Thursday, having stormed through the 1.24 handle in a bid to regain the 1.2450 barrier.

EUR/USD benefits from risk-off flows

The main currency pair is seen extending its bounce from five-day lows of 1.2351 and has rallied near 85 pips since late Asia/ early Europe. The move higher is mainly driven by resurgent EUR demand across the board, as markets prefer to hold the low-yielding/ funding currency Euro amid market unrest and panic, especially after the European stock markets joined the global sell-off.

Moreover, a huge beat on expectations on the German factory orders data further bolstered the bids for the common currency, helping the spot push through the 1.2400 levels. Meanwhile, negative Treasury yields also collaborated to the upbeat tone seen around the major.  

All eyes now remain on the Bundesbank (Buba) President Weidmann’s speech due out shortly ahead of the US trade balance figures, Fedspeak and JOLTs job openings due later in the NA session.

EUR/USD levels to watch

Haresh Menghani, Analyst at FXStreet, noted, “…the ongoing corrective slide seems more likely to get extended towards testing the 1.2300 handle, marking 23.6% Fibonacci retracement level of 1.1554-1.2538 recent upsurge. On the flip side, any meaningful up-move might now confront fresh supply near the 1.2400 handle and is followed by the ascending trend-line support break-point, now turned resistance, near the 1.2450 region. A sustained move back above the mentioned hurdle would negate any near-term bearish bias and pave the way for the resumption of the pair's bullish trajectory.”