The EUR/USD pair eroded part of gains recorded in the previous session and inched back closer to the 1.0900 handle during early European session.
Apart from a modest greenback up-tick, there were no fundamental triggers behind today’s retracement and could be categorized as a technical pull-back from 1.0950 important hurdle.
Meanwhile, investors seemed reluctant from placing fresh bets ahead of the preliminary release of Euro-zone GDP figures, projected to show 0.5% q-o-q growth, and the much awaited Fed monetary policy decision, due to be announced later during the NY session.
Looking at the broader picture, the pair remains stuck within 100-pips broader trading range and has been consolidating last week’s strong gains led by Emmanuel Macron’s win in the first round of the French Presidential election. Despite of the market friendly outcome, investors refrained from buying the shared currency just to protect themselves from any unexpected outcome from the second round of the French elections.
Apart from the mentioned event risks, Friday’s NFP data from the US should also collaborate towards determining the pair’s next leg of directional move.
Wednesday’s US economic docket also features the release of ADP report and ISM non-manufacturing PMI, which although is unlikely to help the pair to break through the recent trading range but should provide some impetus for short-term traders.
Technical levels to watch
Immediate support is pegged at the 1.0900 handle, which is closely followed by support near 1.0885-80 horizontal zone. Weakness below the said support levels could get extended towards 200-day SMA support near 1.0850-40 region ahead of 1.0820 level.
Meanwhile on the upside, 1.0950 level remains immediate strong hurdle, which if cleared decisively has the potential to lift the pair beyond the key 1.10 psychological mark towards its next resistance near 1.1025-30 zone.