EUR/USD jumps to session peak ahead of US CPI and Yellen's testimony

The EUR/USD pair snapped eight consecutive sessions of losing streak and staged a goodish recovery on Thursday from 11-month low touched in the previous session.

Currently trading comfortably above 1.0700 handle, at a fresh session peak around 1.0735-40 band, the pair is benefitting from a broad based greenback retracement, with the overall US Dollar Index witnessing a pullback from the highest level in over 13-years and paused the post-election rally. 

On the economic data from, the final print of yearly Euro-zone CPI for October was bang in-line with consensus estimates, albeit monthly reading fell short-of expectations and ticked lower to 0.2% from 0.4% recorded previously. Mixed CPI print triggered a bout of short-covering and is assisting the major to recover from near-term oversold conditions. 

Focus now shifts to US economic docket, featuring the release of CPI, housing data (building permits and housing starts) and Philly Fed Manufacturing Index, which would be looked upon to reaffirm market expectations that the Fed would eventually raise interest-rates and eventually confirm the near-term up-trend of the US Dollar.

Technical levels to watch

A follow through buying interest above 1.0735-40 region might continue boosting the pair further towards 1.0800-10 resistance area. Momentum above 1.0800 handle could get extended but is likely to be limited at an important horizontal support break-point, now turned strong resistance, near 1.0850 region.

Alternatively, reversal from current resistance level, and a subsequent drop back below 1.0700 handle, would increase the pair's vulnerable to initially head towards 1.0630 intermediate support before eventually dropping to test Dec. 2015 lows support near 1.0550 level.