EUR/USD consolidates biggest daily gains in nine weeks past-1.1200 on steady yields

• EUR/USD eases amid quiet Asian session, mixed updates.
• Fedspeak refrains from clear hawkish communication, Russia-linked fears recede.
• US stock futures fail to track Wall Street, Treasury yields stay firmer.
• German Retail Sales, US ISM Manufacturing PMI to decorate calendar.

EUR/USD struggles to stretch the previous day’s bullish show, retreating towards 1.1200 during a quiet Asian session on Tuesday.

The major currency pair rose the most since mid-November the previous day as the market’s shifted attention from the hawkish Fed, which in turn allowed traders to pare the latest losses.

The risk-on mood favored Wall Street benchmarks and dragged the US Dollar Index (DXY) but the US Treasury yields remained sluggish.

That said, Various Fed policymakers conveyed their dissatisfaction with the higher inflation and favored rate hikes in March. Among the key Fed speakers were Atlanta Fed President Raphael Bostic and Kansas City Fed President Esther George, not to forget Federal Reserve Bank of San Francisco President Mary Daly.

Elsewhere, the Washington Post (WaPo) conveyed the news of Russian response to the US proposal over Ukraine, citing an anonymous Senior Diplomat. “The Russian government has delivered a written response to a U.S. proposal aimed at de-escalating the Ukraine crisis.” It’s worth noting that UK PM Boris Johnson is also scheduled to visit Ukraine on Tuesday whereas US Secretary of State Antony Blinken and Russian Foreign Minister Sergei Lavrov will also hold meetings today.

It’s worth noting that the market’s wait for the key European Central Bank (ECB) meeting, up for publishing on Thursday, also challenges the EUR/USD moves as the US Treasury yields remain lackluster while the S&P 500 Futures print mild gains of late.

Moving on, German Retail Sales for December, expected -0.6% YoY versus -2.9% prior, will entertain EUR/USD traders ahead of the US ISM Manufacturing PMI for January, expected 57.5 versus 58.7 prior, for immediate direction. However, major attention will be given to the Fedspeak and developments concerning Russia.

Read: ISM Manufacturing PMI January Preview: Fed policy counts on a continuing US expansion

Technical analysis

 A clear upside break of a two-week-old descending trend line, around 1.1220 by the press time, keeps EUR/USD buyers hopeful to aim for the 1.1305-15 resistance zone comprising the 50-DMA and 21-DMA.