EUR/USD Current price: 1.1418
- Italian government challenging EU budget rules undermine demand for the common currency.
- US-China trade talks to be critical for direction these days.
The EUR/USD pair seesaws around the 1.1400 level, modestly down when compared to Friday's close at around 1.1440. The dollar recovered some of its poise at the beginning of the day, with the EUR/USD pair falling to 1.1394 with the common currency undermined by headers coming from Italy, as the current government proposed a massive €80 billion budget spend in infrastructure, which violated the Union's budget rules. The positive tone of equities, however, partially offsets concerns, keeping the downside limited. The EU released June construction output, up 0.2% MoM as expected and 2.6% YoY, this last, beating expectations. German Producer Prices came in-line with market's expectations, without affecting the pair. The US session will only bring a speech from FOMC's Bostic, hardly expected to be a game changer. More relevant, a Chinese delegation is in Washington, set to discuss trade and try reaching an agreement.
The pair is short-term bullish according to the 4 hours chart, as it keeps developing above a bullish 20 SMA, this last at around 1.1390, as technical indicators regain their upward strength within positive levels after correcting overbought conditions. The pair would need to break above 1.1450 to gain sustainable upward momentum and challenge the 1.1500 level. Renewed selling pressure below 1.1390, on the other hand, will deny chances of an upward extension for this Monday and result in an approach to the 1.1300 figure.
Support levels: 1.1390 1.1360 1.1330
Resistance levels: 1.1450 1.1490 1.1525
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