The Euro continues to range around the 13-period moving average as traders wait for any significant development related to the spat between the Italian government and the EU. For over a month now, the Italian government and the EU have clashed on Italy’s proposed budget plan for 2019 due to the fact that the budget plan will lead to a budget deficit that does not meet EU standards. This disagreement between the two sides is leading the bloc into political instability which explains the monthly drop in the Common currency. For today, the focus may shift from political fundamentals to economic fundamentals as today’s economic calendar is filled with important data releases from both the EU and the US. From the European side, traders need to focus on the German Unemployment rate, German CPI, and the EU’s GDP growth rate. From the US’s side, traders need to focus on the US Consumer Confidence figure.
The direction of the pair will only be confirmed if prices either break above 1.1446 or below 1.1322. The break of these levels will most likely be triggered by any political development related to Italy's budget plan or be triggered by the outcome of today's economic data releases from both the EU and the US. The break above the 1.1446 level will expose the next resistance level at 1.1517 which coincides with the 200-period moving average. The break below the 1.1322 level will expose the next support level at 1.1285.
Support: 1.1322 / 1.1285
Resistance: 1.1446 / 1.1517