EUR/USD trims recovery gains, retreats below 1.0450 level

The EUR/USD pair's recovery momentum seems to run out of steam, with the pair retreating around 25-pips from session peak.

Currently trading around 1.0445-50 band, the pair attempted to build on to its recovery and posted a daily high level of 1.0472 after the final print of Euro-zone CPI matched expectations. The momentum, however, lacked conviction as investors seemed skeptic of any sustainable recovery amid growing conviction of a faster Fed rate-tightening cycle in 2017. 

The pair, however, has managed to hold in positive territory as the US Dollar eased a bit on Friday after yesterday's surge to the highest level in nearly 14-years. On Thursday, the pair broke below 1.0400 level and dropped to its lowest level since January 2003. 

Traders on Friday will also confront the release of building permits and housing starts data from the US, which would be looked upon for some short-term trading opportunities.

Technical outlook

Carol Harmer, Founder at charmertradingacademy.com, notes, "we are going to struggle around 10460/10525... 60 min charts are not on the climb back from 10366....So there is scope for the market to take another nosedive today...maybe if we reach 10460/10525 we will see the sellers come back in.."

She further writes, "Now to take off further downward pressure we really need to run higher and hold above 10560...only then will the immediate pressure be off the downside......we may then be able to climb back to 10730/10780....Failure to break higher keeps the market under pressure and we see further weakness coming through...Obviously overnight lows of 10366 will entice..however if we lose 10335 we look for further weakness down to  10235 to 10180...."