EUR/USD consolidates near 1.12 amid a lack of catalysts

After testing the 1.12 handle in the early NA session, the EUR/USD pair is having a tough time recovering its losses as the greenback remains bid. As of writing, the pair was trading at 1.1210, down 0.3% on the day.

Earlier in the session, the US Dollar Index surged to its session high above the 97 handle following the upbeat ADP private sector employment and manufacturing PMI reports. However, the index failed to build on its gains as investors remain skeptical about the USD ahead of tomorrow's non-farm payroll report. Furthermore, political turmoil seems to come back to life as it was recently announced that the former FBI director Comey will be testifying in an open and closed session on June 8 before the Senate intelligence committee investigating Russian activities during last year’s election in an open and closed session afterward.

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Although a June rate hike by the Fed seems inevitable at this point, a weak NFP reading could still hurt the greenback as it would diminish the odds of two more rate hikes in 2017. Tomorrow's economic docket will also feature the producer price index data from the euro area but it's unlikely to cause any market reaction.

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Technical outlook

The pair has been trading in a horizontal band in the last 10 days and it could make the next sizeable move with a decisive break out of this channel. 1.1265 (May 23 high/upper range of the channel) is the initial resistance ahead of 1.13 (psychological level/Nov. 9 spike) and 1.1365 (Aug. 18 high). On the downside, supports align at 1.1100 (Fib. 23.6% retracement of Apr. 10 - May 23 rise), 1.10 (psychological level/ Fib. 38.2%) and 1.0930 (Fib. 50%). 

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