EUR/USD bulls defend 1.20 handle ahead of US ISM, FOMC minutes

   •  USD recovery helps snap winning streak.
   •  Dip buyers limiting deeper correction. 
   •  Focus remains on FOMC meeting minutes.

The EUR/USD pair trimmed some of its early corrective losses and has now rebounded around 15-20 pips from the 1.2000 neighborhood.

The pair extended overnight retracement from near 4-month tops and remained under some selling pressure through the early NA session on Wednesday. In absence of any fresh catalyst, a goodish pickup in the US Dollar demand seems to be the only factor prompting some profit-taking slide and snap four consecutive days of winning streak

The greenback recovery move, however, now seems to be losing steam, amid a weaker tone surrounding the US Treasury bond yields, and helped the pair to bounce off from closer to the key 1.20 psychological mark.

Heading into today's important release - the December FOMC meeting minutes, repositioning trade could also be one of the factors contributing towards infusing some volatility around the major. In the meantime, traders will look forward to the release of US ISM manufacturing PMI in order to grab some short-term trading opportunities. 

Technical outlook

Valeria Bednarik, American Chief Analyst at FXStreet write: "The 4 hours chart for the pair shows that it met buying interest around a bullish 20 SMA, as the Momentum indicator keeps heading lower within positive territory, but the RSI pared its decline and attempts to recover around 63, indicating that selling interest is still limited. A positive surprise from US upcoming figures could boost the greenback temporarily, but as mentioned above, the dominant bullish trend remains firmly in place, which means that speculative interest will be looking to buy on retracements."