EURUSD extends the recovery after a steep decline earlier this week, with the price is nearing the intermediate resistance in the 1.1250 area on Thursday. The upside momentum was fueled by dollar weakness as the US currency shifted to a corrective mode after the recent rally due to strong economic data.
Overnight, US dollar index nursed losses versus main competitors including the euro a Treasury yields continued to slid amid trade woes and mixed earning results. By the way, trade stand-off between the US and China make traders bet on a more aggressive Fed rate cut again, which puts the dollar under additional pressure.
On the other hand, the common currency lacks its own upside drivers, therefore, the bullish impetus in the EURUSD pair remains limited. Moreover, ECB is also hinting at additional stimulus down the road, citing economic and trade uncertainty. As such, the euro will unlikely challenge the 1.13 barrier any time soon, unless the greenback comes under a strong bearish pressure. At the same time, the 1.12 support could be derailed once again should the aggressive Fed rate cut bets start to ebb.