• EUR/USD attempts a bounce as the US dollar licks its wounds.
• US yields trade sluggish despite upbeat mood, underpinning the pair.
• 50 DMA remains a tough nut to crack for EUR bulls ahead of ECB minutes.

EUR/USD is making minor recovery attempts just above 0.9900 heading into the European open, as the dollar licks its wounds following the steep drop seen in the US last session.

Investors remain optimistic so far this Thursday, as mixed US ADP and ISM Services PMI doused expectations for aggressive Fed rate hikes. However, it has barely impacted the market pricing of a 75 bps November Fed rate increase, which now stands at 65%. The US Treasury yields trade on the defensive amid a lack of clarity on the Fed tightening outlook, underpinning the main currency pair.

Despite the renewed upside in the major, EUR bulls remain cautious amid escalating geopolitical tensions between the West and Russia over the Ukraine crisis. The European Union (EU) backed new sanctions against Russia, including the oil price cap on Wednesday.

All eyes now remain on the Eurozone Retail Sales, ECB minutes and Fedspeak for fresh incentives, as geopolitical headlines and risk trends will continue playing out.

EUR/USD: Technical outlook

Nothing seems to have changed technically for the major, as the extension of a falling wedge breakout remains capped by the bearish 50-Daily Moving Average (DMA) at 1.0008.

The rejection at higher levels has left the pair hovering around the horizontal 21 DMA at 0.9887. Failure to resist above the latter will expose the 9950 psychological level.

EUR/USD: Daily chart

The 14-day Relative Strength Index (RSI) is pointing higher above the 50.00 level, keeping bulls hopeful.

Daily closing above the 50 DMA barrier is critical to extending the recovery towards the September 20 high of 1.0050.

The next upside target is seen at the 1.1100 round figure, which will be the level to beat for bulls.

EUR/USD: Additional levels to consider