EUR/USD takes a sharp U-turn, reverses daily gains ahead of US data

The EUR/USD pair witnessed a sharp retracement from multi-day tops beyond 1.0600 handle and has now reversed all of its daily gains, dropping closer to session low near 1.0575-70 band. 

A modest greenback recovery, with the key US Dollar Index reversing daily losses to move back closer to 101.00 handle, prompted some profit-taking move following the pair's strong rally of over 100-pips in the past three trading session.

The pair’s sharp reversal during early NA trading session also seems to suggest that investors remain skeptic of any meaningful near-term recovery amid mounting fears over political instability in the region, reaffirmed by plummeting global bond yields.

Next on tap would be the release of new home sales and Revised UoM Consumer Sentiment, which would be looked upon for some follow through US Dollar traction and might drag the pair further during NY trading session.

Technical levels to watch

A follow through weakness below 1.0570 level seems to drag the pair further towards 1.0530 horizontal support ahead of 1.0500 psychological mark. On the flip side, momentum back above 1.0600 handle should accelerate the up-move towards 1.0630-35 intermediate resistance, en-route 1.0675-80 strong barrier.