Bears took over the market on Monday, driven by political turmoil in Italy. As a result, the Euro weakened 1.00% against its American counterpart and thus had reached the 1.1607 level by mid-day. The remaining part of that session was spent with low volatility.
From technical point of view, the pair should recover both today and this week. The nearest resistance area is the 55– and 100-hour SMAs circa 1.1680, while the upper channel line and the 220-hour moving average are located near the 1.1750 area.
Nevertheless, fundamental developments in Italy are likely to drive this currency pair for the following trading sessions. In case of negative news, the bearish impact should push the pair down to its 6-1/2-month low or even the weekly S2 at 1.1550 and 1.1527, respectively.
