EUR/USD finds decent support near 1.18 handle
• EZ Nov. CPI comes in slightly weaker than expected.
• Bulls showing some resilience near 1.18 handle.
• US tax bill vote and data to provide fresh impetus.
The EZ CPI-led selling pressure around the shared currency seems to have abated, with the EUR/USD pair rebounding around 30-pips from over one-week lows.
For the second straight session, the pair failed to sustain/build on its early up-move and met with some fresh supply near the 1.1875-80 zone. Dismal German retail sales data triggered the initial leg of retracement, which accelerated further on softer EZ inflation figures for Nov.
The pair, however, seems to have found decent support near the 1.1800 handle as investors seemed reluctant to place aggressive bets and proffered to remain on the sideline amid sustained cautiousness over the fate of a major US tax reform plan.
Hence, investors' focus would remain glued to a full Senate vote, expected today, on the highly-anticipated US tax legislation, which would have a lasting effect on the US Dollar and eventually help investors determine the pair's next leg of directional move.
In the meantime, today's US economic docket, featuring the release of core PCE price index, personal income/spending data, along with the usual initial jobless claims and Chicago PMI, would be looked upon for some short-term trading opportunities.
Technical levels to watch
The 1.1800 handle remains an immediate support to defend, which if broken seems to accelerate the fall towards 50-day SMA support near the 1.1755-50 region.
On the upside, the 1.1875-80 region now seems to have emerged as immediate strong hurdle, above which the pair is likely to surpass the 1.1900 handle and head towards testing 1.1930 supply zone.