EUR/USD Price Analysis: Drops to 1.1300 mark, reverses the overnight gains to monthly top

• EUR/USD witnessed fresh selling on Thursday amid resurgent USD demand.
• The mixed technical setup warrants caution before placing fresh directional bets.

The EUR/USD pair dropped to the 1.1300 mark during the early part of the European session, reversing Wednesday's positive move to the highest level since November 30. The US dollar made a solid comeback from the vicinity of the monthly low and prompted fresh selling around the major amid thin end-of-year trading volumes on Thursday.

From a technical perspective, the overnight strong intraday rally faltered just ahead of a resistance marked by the 38.2% Fibonacci level of the 1.1692-1.1186 downfall. The mentioned barrier, around the 1.1370-80 region, coincides with the late-November swing high and should now act as a key pivotal point for short-term traders.

Meanwhile, the EUR/USD pair was last seen hovering near the 23.6% Fibo. level, which is followed by the weekly low, around the 1.1275 region touched in the previous day. Some follow-through selling will be seen as a fresh trigger for bearish traders and drag spot prices to the 1.1200 mark en-route the YTD low, around the 1.1185 region.

On the flip side, bulls are likely to wait for a sustained strength beyond the 38.2% Fibo. level before placing fresh bets. The EUR/USD pair might then surpass the 1.1400 mark and test the next relevant resistance near the 1.1440-45 region. The momentum could further get extended towards the key 1.1500 psychological mark.

Meanwhile, neutral technical indicators on the daily chart haven't been supportive of a firm near-term direction, warranting some caution for aggressive traders. The mixed technical set-up suggests that the EUR/USD pair is more likely to extend its two-way price moves and remain confined in a range held since the beginning of this month.

EUR/USD daily chart

Technical levels to watch