EUR/USD eases from highs, back below 1.1800 handle

   •  USD recovers lost ground despite softer manufacturing data.
   •  US tax bill uncertainty might help limit deeper retracement.

The EUR/USD pair struggled to sustain its strength above the 1.1800 handle and retreated few pips from session tops. 

Against the backdrop of some renewed uncertainty over the progress of a long-awaited US tax-cut legislation, today's weaker than expected Empire State Manufacturing Index did little to improve the sentiment surrounding the greenback. 

The key US Dollar Index, however, managed to recover majority of its early lost ground, primarily led by a sell-off in the GBP/USD major and has been the sole factor keeping a lid on the pair's up-move.

Meanwhile, the slightly weaker than expected release of industrial production, coming in to show a 0.2% growth in November as compared to 0.3%, and capacity utilization rate, at 77.1% vs 77.2% expected, helped limit any deeper retracement below the 1.1800 handle. 

With the second-tier US economic data out of the way, the USD price dynamics would continue to act as an exclusive driver of the pair’s momentum through the NY session on the last trading day of the week. 

Technical levels to watch

Immediate support is now pegged near 1.1775 area, below which the pair is likely to accelerate the slide towards 1.1740 intermediate level en-route the 1.1715 strong horizontal support. On the upside, sustained strength above the 1.1800-1.1810 region now seems to lift the pair back towards 1.1850-60 supply zone.