The Euro noticed the Italian crisis and fell
Long Euro detached reacted to the political situation in Italy, but when that imploded, the currency is still unable to resist the pressure, especially after the fed’s rate hike. EURUSD shows a bearish correction for the second consecutive day, and falls at a good pace. Today quotes updated 1-week lows, having lost a level of 1.17, which from a technical point of view is a bearish signal.
In addition to the increased divergence of the courses of the monetary policy of the fed and the ECB following yesterday’s rate hike the us Central Bank, the Euro’s attractiveness decreases with the aggravation of the situation in Italy, where publication of the draft budget has been postponed to 21.00 GMT. because of disagreements in the Cabinet on the question of the size of the deficit.
Finance Minister Tria agree to allow the deficit not higher than 2% of GDP (preferably at the level of 1.6%) in accordance with the requirements of the European Union, whereas the party “Five stars”, which stands for the budget deficit of 2.4%, joined by representatives of the party “League”. According to the latest information, Tria has threatened to resign if the budget is not agreed upon in accordance with his proposals. So until the end of the day, the dynamics of EURUSD will remain nervous, and near the close of trading, volatility may increase.
Also in the short term, the Euro will be ECB President Draghi, inflation data in Germany and the block of statistics from the USA where the key release will be the GDP report for the second quarter. The day the pair closed below the 1.17 level will open the way for further Euro sales with a primary target at 1.1660.
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