EUR/USD slips below 1.0600 handle

The EUR/USD pair ran through some offers during early European session and reversed early gains to session peak level near 1.0635 region.

The pair subsequently accelerated the slide and has now dropped below 1.0600 handle. A fresh bout of greenback buying interest, with the key US Dollar Index testing session peak near 101.50 region, seems to be the only factor attracting some sellers near 50-day SMA region. 

Meanwhile, the market seems to have ignored comments from ECB Governing Council member Francois Villeroy that Euro-zone inflation is no cause for concern as focus remains on the European Central Bank monetary policy meeting on Thursday. 

Also in focus would be the US President-elect Donald Trump's inauguration on Friday, which would help investors determine the pair's next leg of directional move.

Technical levels to watch

A follow through retracement below 1.0580-75 support is likely to drag the pair back towards 1.0555-50 support area ahead of 1.0510-1.0500 important support below which the pair is likely to extend the slide further towards its next support near 1.0450 region.

On the upside, 50-day SMA near 1.0620 region now seems to have emerged a strong resistance, which if cleared decisively might trigger a short-covering rally, even beyond last week's one month high resistance at 1.0685 level, towards reclaiming 1.0700 handle, en-route its next major hurdle near 1.0755-60 region.