EUR/USD recovers early lost ground to sub-1.1700 level, 7-week lows

The EUR/USD pair reversed an early dip to sub-1.1700 level and has now recovered around 35-pips from 7-week lows touched today. 

Currently trading around 1.1725-30 area, the pair's recovery move over the past hour or so lacked any fundamental catalyst and could be solely attributed to short-covering amid some signs of profit taking around the US Dollar. 

With investors looking past Monday's upbeat US ISM manufacturing PMI print, which strengthened prospects for additional Fed rate hike move in 2017, a modest retracement in the US Treasury bond yields helped the pair to rebound from its lowest level since mid-August. 

It, however, remains to be seen if the up-move is backed by any genuine buying as investors continue to evaluate the possible implications of the disputed referendum on Catalonia independence in Spain, held on Sunday.

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Today's economic docket, featuring the release of EZ PPI print, lacks any major market moving releases and hence, the pair remains at the mercy of US bond yield dynamics and broader market sentiment surrounding the USD. 

   •  USD shorts rose, EUR longs surge - ANZ

Technical levels to watch

Immediate resistance is pegged near 1.1740 level, above which a bout of short-covering could lift the pair towards 1.1785 horizontal resistance ahead of the 1.1800 round figure mark.

On the flip side, a strong follow through selling pressure below the 1.1700 handle has the potential to continued dragging the pair towards 1.1670-60 intermediate support en-route 1.1620-10 area.