EUR/USD comfortable above 1.23 handle ahead of US PPI

   •  US-China trade war fears continue to take a toll out of the USD.
   •  A convincing breakthrough 50-DMA needed to confirm additional gains.
 
The EUR/USD pair quickly reversed an early European session dip to the 1.2300 handle and is currently placed at the top end of a narrow trading range.

Early optimism, led by Chinese President Xi Jinping's comments during the Asian session on Tuesday, faded in light of a Bloomberg report that there is a stall in US-China talks from last week. 

Trade-related headlines continue to drive sentiment surrounding the US Dollar, with the latest, not so positive, news failing to assist the greenback to build on a modest uptick and helping the pair to hold with minor gains for the third consecutive session.

Despite a modest uptick, the pair remains below 50-day SMA barrier, currently near the 1.2335 region, and now seemed struggling to build on its post-NFP recovery move from over 1-month lows. 

Traders now look forward to the key highlight from today's US economic docket - PPI print, for some short-term impetus. The key focus, however, would be on Wednesday's consumer inflation figures and the latest FOMC meeting minutes, which might assist investors to determine the pair's next leg of directional move. 

Technical levels to watch

A sustained move beyond the 1.2335-45 immediate hurdle now seems to pave the way for an extension of the pair's upward trajectory back towards reclaiming the 1.2400 handle en-route a major supply zone near the 1.2445-50 region.

On the flip side, the 1.2300 handle now seems to have emerged as an immediate support, which if broken is likely to accelerate the fall towards the 1.2240-35 support area before the pair eventually drops to challenge the 1.2200 handle.