EUR/USD eases from multi-week tops, holds above mid-1.1200s ahead of US data

   •  EU triggers disciplinary process against Italy and exerts some pressure.
   •  A modest USD rebound further collaborates to the intraday pullback.
   •  Traders now eye US ADP report and ISM PMI for some fresh impetus.

The EUR/USD pair failed to capitalize on its early positive move and has now retreated around 25-30 pips from seven-week tops.

The pair stalled its recent positive momentum just ahead of the 1.1300 handle and the latest leg of a sudden pullback over the past hour or so followed the news that European Commission triggered disciplinary process against Italy over public debt.

Although the disciplinary procedures can take up to several weeks/months, the risk of a further escalation in conflicts between Italy's populist government and European officials was seen affecting the shared currency in a negative manner. 

This coupled with a modest US Dollar rebound further collaborated to the pair's intraday pullback, though growing Fed rate cut bets might keep a lid on any meaningful up-move for the greenback and help limit deeper losses, at least for the time being.

Moving ahead, Wednesday's US economic docket - highlighting the release of ADP report on private sector employment and the ISM non-manufacturing PMI, will now be looked upon for some fresh impetus later during the early North-American session.

Technical levels to watch

As Yohay Elam, FXStreet's own Analyst writes: “Looking down, 1.1225 was a swing low on Tuesday and works as support. 1.1190 is where the 50 and 100 simple moving averages converge. Further down, 1.1145 capped EUR/USD in late May and 1.1125 cushioned it around the same time.”

“Resistance awaits at 1.1280 which was served as support in mid-April. Next up, we find 1.1305 that held the currency pair down in a recovery attempt later that month. 1.1325 was the high point in April and is the next line to watch,” he added further.