EUR/USD stalls bullish momentum near 1.1860 supply zone

   •  An uptick in US bond yields helps revive USD demand.
   •  US existing home sale data eyed for trading impetus.

The EUR/USD pair surrendered majority of its early gains to the 1.1860 supply zone and has now dropped to the lower end of its daily trading range. 

Currently trading around the 1.1840-35 region, the pair's stalled its two-day old bullish momentum and the latest leg of retracement of around 20-25 pips was primarily driven by a modest US Dollar rebound. 

Following a muted reaction to the latest news over progress on a major US tax reform bill, an uptick in the US Treasury bond yields helped revive some greenback demand and capped additional gains for the major.

Meanwhile, possibilities of some fresh technical selling, from closer to a resistance marked by the right shoulder of a bearish head & shoulders pattern formation on the daily chart, could also be one of the factors attributable to the pair's pull-back from weekly tops. 

Traders now look forward to the US existing home sales data for some short-term impetus. The key focus, however, would remain on this week's important US macro releases - final GDP growth figures and durable goods orders, which might provide some directional impetus ahead of the Christmas holidays.

Technical levels to watch

A follow-through weakness below 1.1825 level is likely to accelerate the fall towards the 1.1800 handle en-route 1.1775-70 horizontal support. On the upside, the 1.1860-65 region remains an immediate strong hurdle, which if conquered now seems to pave the way for an extension of the pair's up-move towards reclaiming the 1.1900 handle ahead of 1.1930 supply zone.