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   “¢   Investors looked past today’s in-line EZ economic data.
   “¢   A modest USD rebound prompts some fresh selling.
   “¢   Cautious ECB minutes fail to provide any boost.  

The EUR/USD eroded a major part of its early strong recovery gains and has now retreated back closer to the 1.1700 handle.

The pair initially was seen building on overnight rebound from 6-month lows and touched an intraday high, near mid-1.1700s following the release of mostly in-line German Q1 GDP growth figures and GfK Consumer Climate index.

The up-move quickly ran out of steam amid a modest rebound in the US Treasury bond yields, which helped the US Dollar to stall its dovish FOMC meeting minutes-led profit-taking slide and prompted some fresh selling around the major.

The pair retreated further after the latest ECB Monetary Policy Meeting Accounts (minutes) revealed policymakers’ concerns over increased risk of protectionism, which has raised uncertainty over the economic outlook.  

Adding to this, the recent political turmoil in Italy might continue to keep the EUR bulls on the defensive and cap any meaningful up-move in the near-term.

Traders now look forward to the US economic docket, featuring the release of usual initial weekly jobless claims and existing home sales data, which along with Fedspeaks might produce some short-term opportunities.  

Technical levels to watch

A follow-through retracement back below the 1.1700-1.1690 region now seems to pave the way for an extension of the pair’s well-established bearish trend and accelerate the slide towards 1.1660-55 support.  

On the upside, any meaningful recovery attempt is likely to confront fresh supply near the 1.1750-55 region, above which the pair is likely to make an attempt towards reclaiming the 1.1800 handle.