EUR/USD drops to session low, but holds 1.1250

After failing to extend Monday's recovery momentum beyond 1.1300 handle, the EUR/USD pair is witnessing a reversal on Tuesday and is currently trading near session low around mid-1.1200s.

Although, the prevalent risk-off sentiment across Asian / European equities should act supportive for the funding currency, Euro, but ahead of the much awaited FOMC meeting, starting today, seems to force traders to position themselves for any unexpected hawkish comments from the US central bank.

Ahead of the key Fed announcement, spotlight will be on today's release of US monthly retail sales data later during NA session. A surprisingly strong number would be highly supportive for the US Dollar and continue dragging the EUR/USD pair lower.

Meanwhile, the Euro-zone industrial production and employment details might provide some tradable moves during European trading session.

Technical outlook

Mohammed Isah, Technical Strategist at FXTechstrategy notes, "The pair halted its weakness to close higher on Monday and left risk of move higher on the cards. Support lies at the 1.1200 level. Further down, support comes in at the 1.1150 level where a violation will aim at the 1.1100 level. A break of here will target the 1.1050 level. Conversely, on the upside, resistance comes in at 1.1350 level with a cut through here opening the door for more upside pressure towards the 1.1400 level. Further up, resistance lies at the 1.1450 level where a break will expose the 1.1500 level. All in all, EURUSD faces further upside pressure on recovery."