EUR/USD fades an uptick to 1.1410 ahead of EU's verdict for Italy

• A rebound in European equities amid narrowing Italian-DE bond yields lift the Euro.
• Italian Deputy PM Salvini comments offer some reprieve to the Italian bond markets.
• Eyes on the EU judgment on the Italian budget, US durable goods data for fresh moves.

Having posted daily tops at 1.1410 last hour, the EUR/USD pair has entered a phase of consolidation near the 1.14 handle, as the bulls take a breather ahead of the European Union (EU) judgment announcement on the Italian budget due at 1100 GMT.

The bounce in the spot gained extra traction in Europe after the Italian bond markets rebounded alongside the equity markets, as the Italian-German 10-year yields spread eased following some soothing remarks from the Italian Deputy Prime Minister Salvini. Salvini was said to be open to budget revisions.

Moreover, a rebound in the European equities amid risk-recovery dented the demand for the safe-haven, the US dollar, further adding to the renewed upside in the major. The USD index stalled its bounce near 96.90 region and dropped back towards 96.50.

However, the bulls are seen paring back gains amid increased nervousness ahead of the EU verdict for Italy and also after Istat cut Italy 2018 GDP growth forecast to 1.1% from 1.4%. More so, the sentiment around the common currency remains weighed down by the recent ECB Watch reports, citing that the Eurozone money markets are no longer fully pricing a 10 bps ECB rate hike in 2019.

The immediate focus now remains on the judgment for the Italian budget from the EU while the US durable goods data and the sentiment on the Wall Street will also have a significant impact on the pair.

EUR/USD Technical Levels