The EUR/USD pair faded a sharp bullish spike beyond 100-day SMA to 1.1213 level and has now retraced back below 1.1200 handle.

Currently trading around 1.1185-90 band, the pair shrugged-ff dismal German PPI data and extended its recovery trend for the second consecutive day. The pair recovery from 200-day SMA has been driven solely by the broader weaker sentiment surrounding the greenback, which retreated further on Tuesday and reversed part of sharp gains witnessed at the end of last week. 

The upside momentum, however, lacked conviction as market turn nervous ahead of two major central banks (BOJ and the Fed) monetary policy decisons on Wednesday. Although, the Fed is widely expected to stand pat, a surprisingly hawkish stance is likely to produce a knee-jerk bullish reaction for the US Dollar and hence, traders seemed reluctant to carry large bets heading into the big event risk. 

Later during NA session, the release of housing starts and building permits from the US would be looked upon to grab some short-term trading opportunities.

Technical levels to watch

On the downside, 200-day SMA near 1.1150 region should continue to provide immediate strong support, which if broken decisively is likely to accelerate the slide towards 1.1125 intermediate support before the pair breaks through 1.1100 round figure mark. Meanwhile on the upside, bullish momentum back above 100-day SMA, leading to move beyond session high resistance near 1.1213, should now assist the pair to surge past 1.1250-60 strong resistance and head back towards retesting 1.1300 handle.