EUR/USD trim gains as USD recovers lost ground

The EUR/USD pair reversed majority of Friday's early gains and has now turned absolutely flat during early European session. 

Currently trading nearly unchanged from yesterday’s closing, around 1.0440 region, a fresh bout of US Dollar buying interest in the past hour seems to be only factor exerting some selling pressure around the major.

Looking at the broader picture, the pair on Thursday faced rejection around 1.0500 psychological mark and Friday's price action seems to be reinforcing strong supply zone near the said handle. 

Today's release of Gfk German consumer climate index provided little impetus for the pair's moderate recovery from 14-year lows touched at the beginning of current trading week. Traders now focus on US economic docket that includes the release of new home sales data and revised UoM consumer sentiment index for December, due later during NA session. 

Technical levels to watch

Weakness below session low support near 1.0430 area seems to drag the pair back towards 1.0400 handle, which if broken decisively would turn the pair vulnerable to head back towards retesting multi-year lows support near 1.0350 level before eventually dropping to 2003 yearly lows support near 1.0335 level.

Conversely, on a sustained move back above 1.0450-55 (session peak), the pair is likely to make a fresh attempt towards conquering 1.0500 mark above which the recovery trend could get extended towards 1.0530-35 resistance area.