EUR/USD stuck in a range, around mid-1.2400s ahead of Draghi’s speech

   •  Surrenders upbeat EZ PMI led early gains. 
   •  Reviving USD demand seemed to cap up-move. 
   •  US ISM PMI and Draghi eyed for fresh impetus.

The EUR/USD pair struggled to build on early up-move and has now retreated around 25-30 pips from session tops. 

The pair did attempt to build on its post-NFP rebound from the 1.2400 neighborhood and was being supported by a modest US Dollar retracement. This coupled with today's better-than-expected final EZ PMI prints lifted the pair to an intraday high level of 1.2475. 

The up-move quickly ran out of steam amid reviving USD demand, despite a sharp retracement in the US Treasury bond yields. Traders also seemed to refrain from placing aggressive bets and preferred to wait on the sideline ahead of the ECB President Mario Draghi's testimony. 

Valeria Bednarik, American Chief Analyst at FXStreet notes: “ECB's President Draghi is due to testify on the ECB's Annual Report  before the European Parliament, and investors will be looking for clues on upcoming ECB's decision on monetary policy.”

Currently hovering around mid-1.2400s, the US ISM non-manufacturing PMI for January might also help traders grab some short-term trading opportunities ahead of today's key event risk. 

Technical outlook

Valeria further writes: “The pair presents a neutral-to-positive stance in the short term, as in the 4 hours chart, the pair is hovering around a modestly bullish 20 SMA, but holding above the 1.2390 level, the 23.6% retracement of its January rally. In the same chart, technical indicators have bounced from their mid-lines, maintaining upward slopes although below their previous highs. the 1.2480 level is the immediate resistance, ahead of the multi-year high set last January at 1.2536. Beyond this last 1.2570 comes next. To the downside, 1.2425 the daily low is the immediate support, ahead of the mentioned Fibonacci level at 1.2390.”