Italy about to end political drama

In other headlines, Italy’s parties M5S and Lega, seem to surge to power, ending Italy’s political drama for the past months. The PM candidate, Giuseppe Conte is expected to be sworn in today by president Mattarella according to media reports. The new government could challenge Eurozone fiscal rules, should it follow the program agreed by the two parties. The new cabinet will face a vote of confidence by the two houses of parliament, on Monday and on Tuesday. At the current stage, any new headlines about the stabilization in Italy and the Eurozone, could support the EUR.

EUR/USD traded in a sideways manner with some bullish tendencies yesterday, breaking the downward trend-line incepted since the 20th of April and testing the 1.1715 resistance line. We see the case for the pair to trade in a sideways manner however with some bearish tendencies as the USD side could strengthen at the release of the US employment report. Should the pair come under selling interest we could see it breaking the 1.1640 support line and aim for the 1.1550 support barrier. If the pair finds buying orders along its path we could see it breaking the 1.1715 resistance line and aim for the 1.1620 resistance hurdle.