• EUR/USD reverses Tuesday's advance and returns to sub-1.22 levels.
• Further decline is seen if 1.2140 is cleared.

EUR/USD gives away the earlier advance to 1.22 and beyond and slips back to the support region on Wednesday. EUR/USD is dropping toward 1.2150 as the dollar gains ground. The move came alongside the fall in US yields following a bond auction on Tuesday. ECB President Lagarde said that some of the uncertainty has cleared and US CPI marginally beat estimates..

That said, it seems bulls can't regain control of the markets just yet, leaving the door open to the continuation of the leg lower in the short-term horizon with the next target at the weekly lows near 1.2070 (December 9 2020).

Critical support awaits at 1.2125 region where the triple-bottom initially formed in mid-December and tackled in recent days.A breach below this level will lead EUR/USD prices further south to test the weekly lows.

Some resistance awaits at 1.222 swing high, which temporarily capped EUR/USD on Tuesday. It is followed by 1.227 followed by 1.2350 , 2021 high .