Euro muted to Italy's election results

The euro currency was seen muted to the outcome of the Italian elections which showed rising support for the anti-establishment parties while also resulting in a hung parliament. The various parties, led by the 5 Star Movement is expected to start coalition talks.

On the economic front, the UK's services PMI data improved, rising to 54.5 in February as the data beat estimates of 53.3 and gained from January's 53.0. In the Eurozone, retail sales data showed a 0.1% decline which was below estimates of a 0.3% increase.

The non-manufacturing PMI from ISM showed a flat print, as the index registered a print of 55.9, which matched estimates and was unchanged from the previous month's print.

For the day ahead, the economic calendar today will feature comments from NY Fed President; William Dudley followed the U.S. factory orders. Later in the day, the Bank of England's chief economists, Andy Haldane will be speaking. Following the RBA's decision earlier today, the RBA Governor Lowe is expected to speak later in the day.

EURUSD intra-day analysis

EURUSD (1.2349): The EURUSD was seen edging posting gains on the day as the common currency brushed aside the uncertainty from the Italian elections. Price action was seen recovering back to the familiar resistance level of 1.2365 - 1.2330. A close above this level could potentially signal a shift in the bias to the upside and could also invalidate the bearish flag pattern which is already showing signs of invalidation. To the downside, EURUSD will be seen targeting 1.2260 level followed by a test of the lower support near 1.2090 - 1.2070 region.

GBPUSD intra-day analysis

GBPUSD (1.3843): The British pound was seen extending the gains for the third consecutive day although the momentum looks to be slowing in the near term. The brief weakness in the U.S. dollar alongside a better than expected services PMI helped to push the currency pair higher on the day. On the 4-hour chart, price action was seen retracing back to 1.3860 level which marks the 38.2% retracement level. A reversal at this level could see GBPUSD retesting the previous lows at 1.3734. To the upside, price will need to breakout above 1.3897 to shift the bias to the upside.

XAUUSD intra-day analysis

XAUUSD (1322.40): Gold prices remained muted to the Italian election outcome yesterday. However, price action is seen trading within Monday's range at the time of writing. Following the brief retest to the resistance level at 1328 - 1327, gold prices edged lower only to reverse some of the gains. A breakout above the resistance level could keep gold prices biased to the upside with the potential to target 1357 level of resistance. To the downside, gold prices will need to close lower below 1317 to post the declines toward 1303.