• Traders look beyond German political turmoil.
• German President Steinmeier to make a statement at 1330 GMT.
• Speeches by Draghi and Constancio hold the key.
The EUR/USD pair failed to build on the early European session bullish spike and has now retreated around 30-35 pips from session tops.
Following a knee-jerk reaction to the news that German Chancellor Angela Merkel's attempt to forge a four-party coalition collapsed, the pair staged an impressive rebound during the early European session.
The pair briefly moved above the 1.1800 handle but the up-move quickly ran out of steam as investors seemed reluctant to place aggressive bets ahead of key speeches by the ECB policymakers, including Draghi and Constancio.
In the meantime, investors will look forward to the German President Frank-Walter Steinmeier statement due at 2.30PM CET or 1330 GMT.
Meanwhile, uncertainty surrounding the fate of a major US tax overhaul legislation kept the US Dollar bulls on defensive, with the latest political developments in the Euro-zone's largest economy acting as an exclusive driver of the pair's movement at the start of a new trading week.
Technical outlook
Valeria Bednarik, American Chief Analyst at FXStreet writes: "A strong static resistance comes at 1.1820/30, where the pair stalled by the end of last week. Beyond it, the pair can advance up to 1.1860, en route to the 1.1890 price zone, where the pair met selling interest multiple times during October. The mentioned 1.1745 Fibonacci support has become key short-term, as a break below it should favor a new leg lower past the mentioned daily low and toward 1.1705 the 50% retracement of the same rally."
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