The Euro proceeds with its drop as investors worry about Italy's budget plan and its effect on the EU's future political and economic outlook. The Italian government has recently announced a budget plan that will push the budget deficit towards the risky 2.4% mark. Although this figure is below the 3.0% mark allowed by the EU, investors fear that the Italian government is not putting in place initiatives to trickle down the pile of debt its country holds. Moreover, the country is more levered now which poses risks regarding the safety of Italian banks. The Euro is also facing pressure from the U.S Dollar given that the U.S has recently struck a new NAFTA deal. For today, investors will focus on economic data from both the EU and the U.S with the EU's unemployment rate and the U.S's ISM Manufacturing PMI taking center stage.
The Euro breaks below the 1.16127 support level extending the pair's losses and paving the way for a drop towards the 1.15428 support level. Momentum remains bearish given that prices maintain their stance below the three major moving averages.
Support: 1.15428 1.14923
Resistance: 1.16137 1.16414