EUR/USD attempts a tepid bounce towards 1.1350

• A pause in US dollar recovery offers some support to the EUR bulls.
• But appears a dead cat bounce, as technical setup remains bearish.
•  Focus on USD dynamics, Italian politics and Treasury yields ahead of US NFP.

The EUR/USD pair erases entire losses and looks to regain the 1.1350 barrier, helped by fresh US dollar selling across the board, despite the risk-off action seen on the European equity markets.

The US dollar could come under further pressure across its main competitors, as the inversion in the Treasury yield curve points to a weakening US economy, which could lead to a pause in the Fed tightening plans. However, lately, the greenback continues to find support from its safe-haven status, as the US-China trade war fears fuel led risk-aversion.

Meanwhile, the common currency also derives some support from upbeat Eurozone final services PMI report. Although, it remains to be seen if the spot can sustain the bounce, as the Euro looks vulnerable amid the ongoing Italian budget woes, with the latest report citing that the Italian Economy Minister Tria is considering resigning after the budget gets approved.  

Calendar-wise, the immediate focus now remains on the Eurozone retail sales data due on the cards at 1000 GMT for fresh trading impetus. Also, the pair will continue to get influenced by the USD price-action amid a lack of significant macro news from the US docket.

EUR/USD Technical Levels