EUR/USD remains volatile on last trading day of the year

The EUR/USD pair's fresh leg of up-move seems to have lost momentum, with the pair witnessing a sharp retracement of around 50-pips in past hour or so, from the vicinity of 1.0600 handle. 

The last day of 2016 is turning out to be an extremely volatile session for the major. Ahead of Tokyo open, the pair soared through 1.0600 handle and touched the highest level in three-weeks before reversing course back closer to 1.0500 neighborhood. The pair regained traction during mid-European trading session, but failed to reclaim 1.0600 handle and is currently trading back around mid-1.0500s.

Friday's price-action clearly seems to reflect holiday-thinned trading conditions characterized by big-moves in either direction, without any important releases / developments. Hence, it would be prudent to remain cautious as the spotlight remains on the incoming US economic data and expected fiscal policies by Trump administration, which would be key determinants of the pair's next leg of directional move. 

Technical levels to watch

Weakness back below 1.0525 immediate support might now drag the pair back towards 1.0500 psychological mark, which if broken is likely to accelerate the slide towards 1.0470-65 support area. On the upside, sustained move back above 1.0560 region might continue to confront resistance near 1.0600 handle, which if cleared seems to open room for continuation of the pair's recovery trend further towards 1.0660-65 resistance.