EUR/USD retreats to 1.1400 mark ahead of EZ CPI

The EUR/USD pair stalled its recent upsurge to 14-month tops and retreated back closer to the 1.1400 handle during early European session on Friday.

The pair eroded part of previous session's strong gains and the latest leg of downfall could be attributed to a modest greenback recovery. In fact, the key US Dollar Index has managed to bounce off yearly lows and has been one of the key factors weighing on the major.

Meanwhile, possibilities of some profit taking, especially after the pair's recent rally of over 250-pips over the past three trading sessions, might have also collaborated to the pair's retracement on the last trading day of the week.

With markets still digesting the latest remarks by the ECB President Mario Draghi, signalling that the central bank is ready to look through lower inflationary pressure, today’s release of preliminary Euro-zone inflation figures, due in a short while from now, is unlikely to dent the prevalent bullish sentiment surrounding the shared currency. 

   •  ECB: Major shift in stance – Deutsche Bank

Later during the NA session, the US economic docket would also be looked upon for some short-term trading impetus.

Technical levels to watch

On a sustained break below the 1.1400 handle, the pair is likely to accelerate the slide towards 1.1370 immediate support, below which the corrective slide could get extended back towards 1.1300-1.1295 important resistance breakpoint, now turned strong support.

Meanwhile, on the upside, 1.1445-50 area might continue to act as immediate resistance, which if cleared should pave way for continuation of the pair’s upward trajectory further towards reclaiming the key 1.1500 psychological mark en-route its next hurdle near 1.1530-35 region.