The EUR/USD pair struggled to build on last week's tepid recovery move and held within a narrow trading range amid a dearth of positive catalysts. Meanwhile, the downside remains cushioned amid persistent uncertainty over the US tax reform legislation. However, a modest pickup in the US Treasury bond yields extended some support to the US Dollar and is now seen collaborating towards capping the pair below an important support break-point, now turned strong hurdle, near the 1.1675-80 region.
Despite the proximity of critical technical level, traders seemed lacking conviction and held cautions ahead of today's key event risks, including speeches by ECB President Mario Draghi and Fed Chair Janet Yellen. Also in focus is the Eurozone economic docket, featuring the release of flash GDP, industrial production and German ZEW economic surveys. Later during the North American session, the US PPI print would also be looked upon for some short-term trading impetus.
With short-term technical indicators unable to move out of the bearish territory, the pair seems more likely to confront stiff resistance near the 1.1700 handle. Even if it manages to clear this immediate hurdle, any subsequent up-move is likely to be capped at an important confluence resistance near the 1.1730-40 region, comprising of the 100-day SMA and a short-term descending trend-line.
Conversely, a rejection slide from the current resistance zone, leading to a subsequent drop below the 1.1640-35 support, could drag the pair back towards the 1.1600 handle. Some follow-through selling interest is likely to accelerate the slide back towards multi-month lows support near the 1.1555 level before the pair eventually aims towards testing the key 1.15 psychological mark.
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