EUR/USD retreats from weekly tops, upside seems capped

   •  USD rebound a bit on rising US bond yields.
   •  Remains below 1.1675 broken support turned key hurdle.

The EUR/USD pair finally broke down of its Asian consolidative phase and touched a session low level of 1.1623 in the past hour, albeit quickly rebounded few pips thereafter.

With investors looking past the latest disappointment from the long-awaited US tax cut legislation, a modest US Dollar uptick kept a lid on any follow through up-move and held the pair below a broken support turned strong resistance near the 1.1670-80 region.

A goodish pickup in the US Treasury bond yields, supported by hawkish comments by San Francisco Fed President Williams, reaffirming a December Fed rate hike move and projecting three more rate hikes in 2018, underpinned the greenback. 

Meanwhile, the latest comments from the ECB Governing Council member Ewald Nowotny, noting that the ECB should end QE after September if the economy allows, helped limit deeper losses, at least for the time being.

In the absence of any major market moving economic releases from the Euro-zone, traders now look forward to the Prelim UoM Consumer Sentiment Index from the US for some fresh impetus. 

Technical levels to watch

Any further retracement is likely to find support near the 1.1600 handle, below which the pair could slide back to 1.1575 level ahead of multi-month lows support near the 1.1555 region.

On the upside, any up-move might continue to confront fresh supply near the 1.1670-75 region, which if cleared might trigger a short-covering rally towards the 1.1700 handle en-route 1.1745-50 hurdle.
 

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