The Euro bounced off the 1.1435 level for the second time following weakness from the US Dollar. The Common currency was able to rise on Friday as US Dollar bulls took a breather following a three day rally. The cool down was attributed to the US Dollar Index reaching the key 96.10 resistance level but not being able to break above it due to weaker than expected Existing Home Sales figure from the US. The Existing Home Sales figure for September printed at 5.15M compared to the expected 5.30M. Additionally, the Euro was also able to rise as Brexit and Italy politics did not worsen but rather point towards future positivity. With Brexit, in order to resolve the Irish border issue, the UK proposed that the entire nation stay united with EU customs rules instead of only Northern Ireland, bearing in mind that this is a temporary agreement until the UK and EU figure out a satisfactory solution for the Irish border issue. In regards to Italy’s budget, the market is expecting the Italian government to alter their budget deficit plan following the EU’s rejection of the proposed 2.4% budget deficit plan. For today, the pair will be mainly driven by political developments related to Brexit or Italy’s budget plan given that no economic data releases are expected today.
The Euro formed a double bottom after failing to break below the 1.1435 level for the second time. The pair is currently signaling short term bullish momentum after breaking above both the 13-period moving average and the 50-period moving average. A continuation in the rise will be confirmed if the pair breaks above the 1.1553 resistance. A break above this resistance level will pave the way for a rise towards the 1.1631 resistance level.
Support: 1.1517 1.1435
Resistance: 1.1553 1.1631