EUR/USD Forecast: Bulls Struggling To Break Through 1.1670-80 Barrier

The US Dollar gained some positive traction at the start of a new trading week and once again capped the EUR/USD pair at an important support break, now turned resistance, near the 1.1670-80 region. Renewed uncertainty over the progress of Republican-led tax reform plan spooked the USD bulls and supported the pair's modest recovery move from over three-month lows touched last week.

Meanwhile, growing prospects for an eventual Fed rate hike move in December was no longer enough to reignite the greenback rally, with subdued action around the US Treasury bond yields also doing little to provide any fresh bullish impetus.

In absence of any major market moving economic releases on Monday, the pair remains at the mercy of any fresh news/developments over the US tax legislation and the US bond yield dynamics.

From a technical perspective, the pair has been struggling near the 1.1680 level and hence, it would be prudent to wait for some follow-through buying interest before positioning for additional gains. A clear break through the mentioned hurdle is likely to lift the pair beyond the 1.1700 handle back towards retesting 100-day SMA barrier near the 1.1725-30 region.

Alternatively, rejection slide from the current resistance area might now find strong support near the 1.1600 mark. A convincing break below the said handle would negate prospects for any further recovery and turn the pair vulnerable to break below an intermediate support near mid-1.1500s and dart towards testing the key 1.15 psychological mark.