EUR/USD surrenders early tepid recovery gains, back below 1.16 handle

   •  Fails to capitalize on early tepid recovery led by USD weakness.
   •  Technical selling emerges above 1.1600 handle.

The EUR/USD pair failed to sustain a move beyond the 1.1600 handle and has now surrendered majority of its daily gains, retracing around 25-pips from session tops.

Currently trading around 1.1590-85 band, the pair's slide over the past couple of hours lacked any catalyst and seemed primarily driven by some fresh technical selling from closer to a broken support, now turned strong hurdle near 1.1615 area.

   •  EUR futures: march south unabated

Meanwhile, the US Dollar held defensive in the wake of some fresh uncertainty over the long-awaited US tax reforms plan and might now help limit deeper losses, at least for the time being.

   •  USD under pressure from tax reforms uncertainty - BBH

The pair's retracement from higher levels could also be attributed to some cross-driven weakness, with the EUR/JPY cross hitting near two-month lows in the past hour. 

With an empty US economic docket, technical factors and broader market sentiment around the greenback would remain key determinants of the pair's movement through the NY trading session on Wednesday.

Technical levels to watch

Immediate support is pegged near 1.1560 level, below which the next key target for bears would be psychologically-important 1.1500 handle. On the upside, the 1.1600-10 region now seems to have emerged as an immediate hurdle, above which a bout of short-covering could lift the pair towards the 1.1655-65 hurdle.