EUR/USD quickly retreats from session tops, back below mid-1.1700s

The EUR/USD pair continued gaining traction through early European session and touched a session high level of 1.1775, albeit quickly retreated few pips thereafter.

The pair built on overnight recovery move from three-week lows and was being supported by persistent US Dollar selling bias, led by ongoing US political drama and skepticism over any additional Fed rate hike action by the end of this year. 

On the economic data front, the release of upbeat German PPI print, showing that prices at factory levels rose by more than expected in July, seems to have been largely negated by lower Euro-zone current account surplus for June. 

Meanwhile, the modest uptick seemed lacking strong conviction, especially after yesterday's dovish ECB monetary policy meeting minutes, with the pair quickly retreating around 25-30 pips from session tops to currently trade around the 1.1745 region.

   •  ECB minutes raised concerns about the risk of an exchange rate overshoot in the future - Barclays

The market also seemed disappointed by the recent news that the ECB President Mario Draghi would not discuss monetary policy outlook at next week's Jackson Hole Symposium. This coupled with fading prospects of ECB tapering might now prompt some additional profit taking on the last trading day of the week. 

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Today's US economic docket features the only release of Prelim UoM Consumer Sentiment Index, which would be followed by a scheduled speech by Dallas Fed President Robert Kaplan.

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet writes: "The pair has an immediate resistance in the 1.1770/80 region, with gains above the level exposing the 1.1820/30 price zone, where selling interest will likely contain the advance. Below 1.1690, on the other hand, the pair can extend its decline to fresh weekly lows around 1.1650, while further declines beyond this last could see the pair nearing 1.1600 by the end of the week."