EUR/USD Forecast: break below 1.1700 support to open room for additional weakness

The EUR/USD pair's attempted follow-through recovery on Tuesday quickly ran out of steam near the 1.1830 region, with Italian political developments keeping a lid on any meaningful up-move. News reports that Paolo Savona, an 81-year-old economist and former minister with Euro-skeptic views, will be designated the Minister of the Economy and Finance prompted some fresh selling on Tuesday. 

The weaker tone extended through the Asian session on Wednesday as traders now look forward to the release of flash Euro-zone PMI prints for some immediate respite. Should the macro data add to recent signs of an economic slowdown, it would reinforce market expectations that ECB will adopt a more cautious stance on monetary policy and exert some fresh selling around the shared currency. 

Later during the NY trading session, the latest FOMC meeting minutes would be closely scrutinized for clues about the central bank's near-term monetary policy outlook, which would eventually influence the USD price-dynamics and produce some meaningful trading opportunities. 

Meanwhile, the price action, wherein the pair has been struggling to register any meaningful recovery, clearly seems to suggest that the near-term bearish slide might still be far from over. The negative bias would be reaffirmed once the pair decisively breaks below its immediate support near the 1.1710-1.1700 region, marking 38.2% Fibonacci retracement level of the 1.0341-1.2556 strong up-move. 

A convincing break below the mentioned support is likely to accelerate the fall towards 1.1665-60 intermediate support before the pair eventually drops to test sub-1.1600 level. Alternatively, any recovery attempts back above the 1.1800 handle might continue to confront some fresh supply near the 1.1830-35 region, which if cleared might trigger a short-covering bounce and lift the pair beyond the 1.1900 handle towards testing its next major hurdle near the 1.1940-50 zone.