EUR/USD manages to hold above 1.23 handle ahead of US ISM PMI

   •  Finds decent buying interest on every dip below 1.23 mark.
   •  A modest USD rebound now seemed to cap gains.
   •  US ISM PMI/Fedspeak eyed for fresh impetus.

The EUR/USD pair continues to find some fresh buying interest on every dip below the 1.2300 handle but has struggled to gain any follow-through traction. 

The pair had good two-way moves at the start of a new trading week and was initially weighed down by the outcome of the Italian elections. Adding to this, slightly weaker than initially expected Euro-zone services PMI prints dragged the pair to an intraday low level of 1.2269.

The dip was quickly bought into and the pair momentarily turned positive during the mid-European session. However, a modest US Dollar rebound, despite the ongoing slide in the US Treasury bond yields, capped any additional gains and the rebound fizzled out near the 1.2335 area. 

Meanwhile, the price action clearly suggests that the outcome of Italian parliamentary elections was not enough to alter investors' bullish view for the major and hence, dip buying interest seems more likely to limit any immediate downside. 

Traders now look forward to the US ISM non-manufacturing PMI, which followed by the Fed Governor Randal Quarles' speech might assist grab some short-term opportunities.

Technical levels to watch

A convincing break below 1.2270-65 immediate support is likely to accelerate the fall towards 55-day SMA support near the 1.2200 handle. On the upside, momentum above 1.2335 level, leading to a subsequent breakthrough 1.2355-60 supply zone, might trigger a short-covering bounce and assist the pair to head back towards reclaiming the 1.2400 handle.