EUR/USD fails ahead of 1.07 handle, surrender daily gains ahead of US data

The EUR/USD pair failed to build on tepid recovery move to 1.0700 neighborhood and has now reversed all of its daily gains to currently trade around 1.0675-80 region.

Spot ran through some fresh offers after the preliminary Euro-zone inflation figures fell short of consensus estimates, with the headline CPI easing to an annualized pace of 1.5% during the month of March. Against the backdrop of recent ECB headlines, revealing policymakers readiness to continue with the central bank's aggressive easing program attracted some follow through selling pressure around the shared currency. 

However, a subdued action around the US treasury bond yields has failed to extend any additional support to the greenback's overnight strong recovery move led by upbeat US GDP print, with the key US Dollar Index entering a consolidative phase just below mid-100.00s and is eventually collaborating towards limiting further downslide for the major.

Focus now shifts to the US economic docket, featuring the release of Fed's preferred inflation gauge - Core CPE Price Index, accompanied by Personal Income / Spending data and followed by the Chicago PMI and Revised UoM Consumer Sentiment Index for March.

US: Consumer sentiment, core PCE inflation and income/spending data in the limelight - TDS

In addition to this, speeches from couple of FOMC members - New York Fed President William Dudley and Minneapolis Fed President Neel Kashkari, would also be looked upon for impetus during early NA session.

Technical levels to watch

A follow through weakness below 1.0670 level is likely to get extended towards 100-day SMA support near 1.0635-30 region, below which the pair seems vulnerable to break below the 1.0600 handle and head towards testing its next support near 1.0570-65 region.

On the flip side, the 1.0700 handle now seems to have emerged as immediate resistance and a sustained recovery above this immediate hurdle, leading to a subsequent strength beyond 1.0725 horizontal resistance, is likely to trigger a short-covering rally back towards the 1.0800 handle.