EUR/USD in search of firm direction, range-bounce around mid-1.1600s

   •  Capped below 1.1680 level amid renewed USD buying interest.
   •  Sliding US bond yields help limit deeper losses. 
   •  Focus remains on developments around the US tax bill.

The EUR/USD pair has managed to rebound around 20-pips from session low but remained confined within a narrow trading range through the early NA session.

Currently holding marginally above mid-1.1600s, the pair struggled for a firm directional bias and remained capped below an important support break point, now turned resistance, near the 1.1670-80 region. 

A goodish pickup in the US Dollar demand, primarily led by the latest UK political headlines-led sell-off in the British Pound kept a lid on the pair's steady recovery move from over 3-month lows touched last week.

However, a sharp slide in the US Treasury bond yields, coupled with concerns over the long-awaited US tax reform bill failed to provide any additional boost to the greenback and helped limit any immediate sharp downslide for the major.

The pair's modest uptick from session lows could also be attributed some cross-driven strength, with the EUR/GBP cross jumping to over one-week tops, beyond the 0.8900 handle.

With an empty US economic docket, investors' focus would remain glued to the progress over the US tax legislation and the US bond yield dynamics. 

Technical levels to watch

A convincing break through the 1.1670-80 barrier is likely to lift the pair beyond the 1.1700 handle towards 100-day SMA barrier near the 1.1725-30 region.

Alternatively, a slide below 1.1630 level, leading to a subsequent break below the 1.1600 handle, would turn the pair vulnerable to challenge multi-month lows support near mid-1.1500s before eventually dropping to the key 1.15 psychological mark.