Is EU ahead of a political storm?

The Catalan elections were carried out yesterday and the separatist parties won. The result was interpreted as a vote of defiance to Rajoy’s government but it could also be interpreted as a renewed message to the EU which backed Rajoy’s government in the post referendum period. This is only one issue that EU will have to face. Tension is also expected within EU, as the European Commission triggered a process that could see Poland stripped of its voting rights in Brussels. The process was triggered as Poland proceeded to reforms of its judicial system, which the EU Commission opposes and views as threatening to its independence. On another front, the refugee issue may be setting the basis of future coalitions within the EU about the refugee issue, with central and eastern European member states mostly having a more negative stand towards EU quotas of incoming refugees. Also on Thursday British PM Theresa May, visited Poland and media reports suggested that the British PM was searching for allies within the EU, ahead of the Brexit negotiations, undermining EU unity on the following complex subjects of the Brexit negotiations.

EUR/USD dropped during today’s Asian morning, tested the 1.1820 support line and then regained some of its losses and continued trading between 1.880 resistance level and the aforementioned support level. Should it come under buying interest, the pair could break the 1.1880 resistance level and aim for the 1.1910 resistance level. On the other hand should it come again under selling interest the EUR/USD could break the 1.1820 support level and aim for the 1.1795 zone.