EUR/USD clings to gains above 1.19 handle

The EUR/USD pair continued gaining traction through mid-European session and touched a session high level of 1.1922, albeit retreated few pips thereafter.

With investors looking past Friday's report that the ECB may not be ready with its monetary stimulus reduction plan until December, a fresh wave of US Dollar selling bias helped the pair to recover back above the 1.1900 handle. 

The greenback remained under some selling pressure at the start of a new trading week and was being weighed down by Friday's disappointing US monthly jobs report. 

This coupled with the prevalent cautious sentiment, N. Korea's latest hydrogen bomb test over the weekend, further underpinned the EUR's funding currency status and extended additional support to the major.

Further up-move, however, remained capped amid growing market conviction that the Fed would eventually start unwinding its massive $4.5 trillion balance sheet and could also raise interest rates further in 2017.

Moving ahead, this week's key focus would remain on the ECB monetary policy decision, which would also contributed towards determining the pair's next leg of directional move. 

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Technical levels to watch

Weakness back below the 1.1900 handle might continue to find support near 1.1880-75 zone, below which the pair is likely to slip back towards 1.1825-20 support en-route the 1.1800 handle.

On the flip side, a strong follow through momentum beyond 1.1925 level could get extended back towards 1.1975-80 hurdle before the pair eventually aims to reclaim the key 1.20 psychological mark.