EUR/USD on steady recovery path, aiming to reclaim 1.0500 mark

The EUR/USD pair extended its near-term recovery from multi-year lows and now seems to be attempting a fresh move towards 1.0500 psychological mark in a subdued holiday mood.

Currently trading around 1.0475-80 band, testing session peak, the US Dollar bulls seemed uninspired by yesterday's impressive US consumer confidence index, which rose to the highest level since August 2001 and reinforced market expectations for stronger US economic growth and higher interest rates. The upbeat reading, however, failed to attract fresh buying interest around the greenback as investors now look forward to see tangible and detailed economic policies from the Trump administration before pushing the greenback further.

An empty Euro-zone economic docket will do little to inspire traders during European session and from the US, pending home sales data is also unlikely to provide any impetus for the pair's directional move. However, the thin market liquidity conditions might aggravate the moves and trigger a sudden spurt in volatility.

Technical levels to watch

From current level 1.0500 handle (Dec. 22 high) remains immediate resistance, which if conquered has the potential to lift the pair further towards 1.0530 horizontal resistance. On the downside, 1.0460-55 area now becomes immediate support to defend below which the pair is likely to head back towards 1.0430 intermediate support (yesterday's low) en-route 1.0400 handle.