EUR/USD eases from highs, still well bid near 4-month tops

   •  Surging US bond yields prompts some profit-taking.
   •  Persistent USD weakness might limit deeper losses.
   •  Final US manufacturing PMI unlikely to provide any meaningful impetus.

The EUR/USD pair stalled its bullish momentum just ahead of the 1.2100 handle and retreated around 20-25 pips from 4-month tops touched earlier today. 

The pair's modest retracement from higher levels lacked any obvious catalyst and would still be categorized as a consolidation phase amid broad-based US Dollar selling pressure. 

A goodish rebound in the US Treasury bond yields, which although has failed to ease the prevailing strong bearish pressure surrounding the greenback, seems to be the only factor keeping a temporary lid on the pair's strong up-move. 

Meanwhile, today's mixed Euro-zone PMI prints failed to provide any additional boost, with the USD price dynamics acting as an exclusive driver of the pair's momentum on the first trading day of 2018.

Currently hovering around 1.2065 level, traders now look forward to the only scheduled release from the US economic docket - final manufacturing PMI, in order to grab some short-term opportunities.

Technical levels to watch

The 1.2080-90 region (2017 yearly tops) might continue to act as immediate resistance, above which the pair is likely to surpass the 1.2100 handle and aim towards testing its next hurdle near the 1.2160-65 zone.

On the flip side, 1.2035-30 resistance break-point now seems to protect the immediate downside, which if broken might trigger a corrective slide towards the 1.20 handle en-route 1.194540 horizontal support.