EUR/USD surges through 1.1200 mark

After an initial wobble on softer EZ CPI print, the EUR/USD pair caught some fresh bids and surged through the 1.1200 handle.

The pair's sharp up-tick during mid-European session could be attributed to some month-end FX hedge rebalancing flows. Adding to this, possibilities of some short-squeeze on a sustained break through yesterday's settlement price around 1.1185 level might have also collaborated to the pair's sharp up-surge in the past hour or so. 

Moreover, a sharp retracement in the US treasury bond yields, which failed to lend any support to the US Dollar's early up-move, further aggravated the move and lifted the pair beyond the 1.1200 handle to a three-day high near 1.1215-20 region.

Meanwhile, market seems to have digested today's downbeat EZ flash CPI print for May, showing easing inflationary pressure in the region, with the greenback price-dynamics acting as an exclusive driver of the pair's momentum through European trading session on Wednesday.

Traders now look forward to the US economic docket, featuring the release of Chicago PMI and pending home sales data, later during the NA session, ahead of Fedspeaks for some fresh impetus.

Technical levels to watch

A follow through buying interest has the potential to continue boosting the pair towards multi-month highs resistance near 1.1260-65 region, above which the momentum could get extended towards Nov. 2016 swing highs resistance near the 1.1300 handle.

On the flip side, 1.1160-65 area now becomes immediate support to defend, which if broken could accelerate the slide towards 1.1130-25 intermediate support en-route the 1.1100 handle.