EUR/USD bulls trying to defend 1.23 handle ahead of German CPI

   •  Upbeat US GDP print continues to underpin the USD demand.
   •  Downside remains limited ahead of prelim German CPI figures.
   •  Traders also eye US economic releases for some fresh impetus.

The EUR/USD pair failed to sustain early recovery gains and momentarily dipped below the 1.2300 handle in the past hour, albeit quickly recovered few pips thereafter.

The initial uptick ran into some fresh supply near the 1.2335 area and the pair drifted into negative territory for the third consecutive session, extending its corrective slide from 6-week tops set on Tuesday. 

Yesterday's bullish US GDP growth figures, showing that the economy expanded at an annualized pace of 2.9% in the last quarter of 2017, helped the US Dollar to reverse early dip and was seen as one of the key factors behind the pair's retracement of around 35-40 pips from session tops. 

The downfall, however, seemed limited, at least for the time being, as traders preferred to wait for the release of German prelim consumer inflation numbers before initiating any fresh positions. 

Later during the early NA session, a slew of US macro releases - the core PCE price index (the Fed's preferred inflation gauge), personal income/spending data, usual initial weekly jobless claims, Chicago PMI and revised UoM consumer sentiment - might also provide some fresh impetus and help traders grab some short-term opportunities.

Technical levels to watch

A follow-through weakness below 1.2285 level now seems to turn the pair vulnerable to break below the 1.2240-35 intermediate support and head towards testing the 1.2200-1.2180 support area. On the upside, the 1.2335-40 area might continue to act as an immediate resistance, above which a bout of short-covering could lift the pair back towards reclaiming the 1.2400 handle.