EUR/USD rises to 1.1100 despite Italy’s political chaos
- Euro bounces against the US Dollar but remains lower versus CHF and GBP.
- Italy: Prime Minister Giuseppe Conte announced his resignation.
The EUR/USD pair reached at 1.1064 earlier today, the lowest intraday level since August 1st and then bounced to the upside hitting fresh daily high at 1.1100. As of writing, shows a bullish tone trading at 1.1099, testing the 1.1100 zone. The euro is rising versus the US Dollar for the first time in five days, after a 140-pip slide. Again it found support around the 1.1060 area.
Conte resignation ignored by Euro
Recently the Italian Prime Minister Giuseppe Conte announced his resignation, on a new chapter of the political crisis. Now President Mattarella will begin the process of consulting Parliament to see if a new government can be form. If not, Italy may go to elections around October.
The euro remain steady in the market during Conte’s speech at the Parliament. EUR/USD held above the critical support at 1.1060 while at the same time EUR/CHF did not reach fresh lows.
The move higher in EUR/USD appears to be driven by a decline of the US Dollar against European currencies and also as US yields consolidate near daily lows.
EZ and US events ahead
In the US, no relevant data was released today. Fed’s Daly and Quarles will speak later today. Tomorrow housing data and the FOMC minutes are due. The key event of the week will likely be on Friday with Fed’s Powell speech.
In the Eurozone, German producer inflation came in line with expectations. The next critical report will be the PMIs on Thursday. “Markit's preliminary PMIs and especially the German manufacturing one may have a significant impact on the euro. Low expectations may result in an easy path for a beat, but FXStreet's Surprise Index points to another disappointment”, wrote Yohay Elam, analysts at FXStreet.
The US-China trade tensions, Brexit developments and the Italian political crisis will also continue to be watched closely.
Author
Matías Salord
FXStreet
Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.
