The Euro hovers around the 200-period moving average in anticipation of updates on talks between the European Commission and the Italian government on Italy's controversial budget plan for 2019. The latest on this matter came on Tuesday when the Italian government's refused to alter the plan as demanded by the EU. Till now, we have not seen any retaliation from the EU's side, and this makes it difficult for Euro traders to decide on a directional bias for the pair. Surprisingly, the Euro did not push lower following key resignations in the UK due to UK's local outrage with the Brexit deal draft agreed on between Theresa May and the EU. Such unprecedented reaction may be due to investors focusing on developments related to Italy's budget plan only, even though we believe that Brexit remains a key driver to the Single currency's performance.
The pair continues to attempt to break above the 1.1331 resistance level and the confirmation of the break will depend on any development related to Italy's budget plan or Brexit. If nothing significant occurred relating to these topics then traders will get confirmation if prices broke above yesterday's high at 1.1361. The break above 1.1361 will expose the next key resistance level at 1.1400.
Support: 1.1215 / 1.1150
Resistance: 1.1331 / 1.1400