Fresh bids emerged near 1.2110, allowing a quick rebound in EUR/USD to test the 1.2150 level, as the price now consolidates the uptick ahead of the key US economic data. The risk sentiment witnessed a major turnaround, as the European equities embarked upon a recovery mode after a mixed start on the session. The pan-European benchmark, the Euro Stoxx 50 rallies 1% so far, lifting the overall market mood while weighing on the safe-haven US dollar. The risk-recovery also helps the futures tied to the S&P 500 index trim losses, now trading around 3,840 levels.

Ahead of the European open, the main currency pair extended Monday’s bearish sentiment and fell as low as 1.2108, as the US dollar gained ground amid intensifying risk-off mood, thanks to the US fiscal stimulus deadlock and renewed US-China tensions over the South China Sea.