EUR/USD retreats after hitting fresh multi-week tops

The EUR/USD pair struggled to build on early gains to fresh five week tops and turned sharply lower, erasing all of its gains recorded in the previous session.

The post-FOMC selling pressure surrounding the greenback seems to have abated and prompted traders to take some profits off the table ahead of the US economic releases. In fact, the key US Dollar Index staged a goodish recovery from sub-100.00 mark and has been an exclusive driver of the pair's retracement from the highest level since Feb. 6.

In absence of any fundamental drivers, market players also attributed the pair’s slide, in the past hour or so, to the latest OpinonWay French election poll results that showed Le Pen gaining some ground. 

Meanwhile, market also seems to have digested ECB Nowotny’s hawkish remarks on Thursday, indicating possibility of raising the deposit rate before ECB raised its main refinancing rate, and preferred to turn cautious ahead of any news coming out of the G20 and Trump-Merkel meeting.
 
On the economic data front, the release of industrial production data and prelim UoM consumer sentiment index might also provide some impetus during early NA session.

Technical levels to watch

A follow through retracement below 1.0730 level is likely to trigger a fresh leg of corrective slide towards 1.0700 handle, below which the pair might turn vulnerable to head back towards 100-day SMA support near 1.0655-50 region.

On the upside, momentum back above 1.0765 level now seems to lift the pair through 1.0800 handle towards testing its next major hurdle near 1.0820-30 zone.