The Euro moves higher as Italian Prime Minister, Giuseppe Conte promised to reduce Italy's budget deficit to 2.2% in 2020 and 2.0% in 2021. This indicated to the market that the Italian government will act in a compliant manner in regards to the country's debt and riskiness. For today, Conte called for a meeting with his ministers to further discuss the budget issue and hence investors need to monitor the outcome of this meeting. Additionally, investors need to keep an eye on the spread between the 10-year Italian government bond yield and the 10-year German government bond yield. A tightening in the spread will represent a decrease in the perceived risk of Italy's debt which will reflect positively on the Euro. The pair will also be driven by the U.S Dollar with the ADP Nonfarm Employment Change set to be released before the opening of the U.S trading session.
The Euro bounced off the 1.15079 support level and rises above the 13-period moving average. A break above the minor 1.15939 resistance level will pave the way for a short term upward continuation towards the next resistance level at 1.16137. The rally may continue but only if the pair was able to break above the 50-period moving average and the 200-period moving average. Therefore, to confirm a rise towards the 1.17000 level, the pair needs to first break above 1.16503.
Support: 1.15079 1.14468
Resistance: 1.15939 1.16137