EUR/USD turns flat amid subdued trading action

The US Dollar extended its recovery during early NA session, with the EUR/USD pair erasing tepid recovery gains and drifting into negative territory.

Currently trading around 1.0430 level, testing session lows, the pair ran through fresh offers after repeatedly failing to decisively break through 1.0465-70 resistance area marking 23.6% Fibonacci retracement level of its post-ECB slide from 1.0839 to 1.0352 - 14-year low touched at the beginning of this week. 

Also on Thursday, the pair failed to build on to disappointing US income / spending data-led spike to 1.0500 handle and reversed majority of daily gains, albeit settled with moderate strength. 

The pair's recent price action clearly suggests that the recent leg of recovery was solely led by unwinding of short positions from near-term oversold conditions and ahead of holiday season, while the pair's strong bearish trend remains intact. 

Next in focus would be the release of new home sales and revised UoM consumer sentiment index from the US. 

Technical levels to watch

On a sustained weakness below session low support near 1.0430 area is likely to pave way for additional slide towards 1.0400 handle, which if broken might continue dragging the pair initially towards retesting multi-year lows support near 1.0350 level and eventually towards 2003 yearly lows support near 1.0335 level. On the flip side, 1.0450-55 area now becomes immediate strong hurdle above which the pair is likely to make a fresh attempt towards reclaiming 1.0500 psychological mark.