EUR/USD clings to recovery gains above 1.0400 ahead of EU CPI

The greenback extended its profit-taking slide, lifting the EUR/USD pair farther from previous session's 14-year low level of 1.0366.

Currently trading around 1.0435-40 region, having posted a session peak at 1.0455 level, the pair's recovery gained fresh traction during early European session as traders seemed to lock-in some profits following the US Dollar's recent up-surge to more than 13-year highs, in wake of Wednesday's hawkish Fed statement.

Looking at the broader picture, the current pull-back could be categorized as a technical bounce, from near-term oversold conditions, and could fizzle out very fast as speculations of faster pace of Fed rate-hike moves in 2017 should continue underpinning the greenback and restrict any sharp recovery for the major. 

Investors now look forward to the final print of the Euro-zone inflation for the month of November, expected to match original reading of 0.6% on yearly basis. Later during NA session, US housing market data - building permits and housing starts, might provide some impetus for short-term traders. 

Technical levels to watch

The pair has immediate support near 1.0400 handle, below which a fresh bout of selling pressure is likely to drag it below multi-year lows support near 1.0365 region and 1.0350 level, towards testing 1.0300 handle. On the upside, sustained recovery above 1.0465 level, previous support turned resistance, is likely to assist the pair back towards 1.0500 psychological mark en-route 1.0530-35 strong resistance.