EUR/USD surrenders early gains, but manages to hold above 1.18 handle

Having posted a session high near mid-1.1800s, the EUR/USD pair ran through some fresh offers and drifted into negative territory for the second consecutive session.

The pair extended previous session's sharp pull-back from near 3-week tops and touched an intraday low level of 1.1815, before recovering few pips to currently trade around the 1.1830 region. The latest leg of sharp slide over the past hour or so lacked any fundamental catalyst and could be solely attributed to some cross-driven weakness.

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The latest news reports that the EU may offer the UK a two-year transition period dragged the EUR/GBP cross below the 0.8900 handle, farther from one-month tops touched on Thursday, and was eventually weighing on the EUR/USD major. 

Meanwhile, a mildly softer tone around the US Dollar, backed by weaker US Treasury bond yields, helped limit deeper losses, at least for the time being.

Moving ahead, the key US inflation figures, as measured by CPI, would be the key highlight from today's US economic docket, also featuring the release of monthly retail sales and Prelim UoM Consumer Sentiment Index for September. 

Apart from the US macro data, speeches from influential FOMC members - Chicago Fed President Charles Evans and Dallas Fed President Robert Kaplan, would also drive the pair's movement on the last trading day of the week. 

Technical levels to watch

A follow through weakness below the 1.1800 handle could get extended towards 1.1770 level, below which the pair could fall towards 1.1725-20 support area.

On the upside, the 1.1845-50 region, also coinciding with 50-day SMA, now seems to have emerged as immediate resistance, which if cleared could lift the pair beyond 1.1880 level (Thursday's high) towards the 1.1900 handle.