The Euro drops back towards 1.1440 as investors worry Italy’s budget plan will spark more political uncertainty in Europe as the European Union and Italy disagree on how they should approach the country’s budget deficit. For today, the market will continue to await the Italian government’s official reply to the EU’s rejection of its 2.4% budget deficit plan. A negative comment from the Italian government will spark pessimism around the future state of the political scene in the EU and drive the Euro currency lower.
The Euro slides back down for a third attempt to break below the 1.1435 support level. The drop comes towards this level comes after growing uncertainty within the EU. The fall back down towards the 1.1435 support level marked the rejection to break above the 50-period moving average signaling weak bullish momentum. With that being said, the pair's price action points towards strong bearish momentum given that the price is currently trading below the three major moving averages.
Support: 1.1517 1.1435
Resistance: 1.1553 1.1631