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News from Italy puts pressure on EUR / USD

Aug 21 2019, 03:56 PM (+06) |

After a small correction on Tuesday, today the EUR / USD currency pair resumed its downward movement. By selling European currency, investors react to news from Italy, where Prime Minister J. Conte resigned last night in order to avoid early parliamentary elections and try to resolve the political crisis in the country. German Finance Minister O. Scholz hastened to calm the markets, noting that the difficult domestic political situation in Italy would not provoke a crisis in the EU.

Another risk factor for the European currency is the Brexit problem, so bidders will very closely monitor the meeting of Angela Merkel and Boris Johnson, which will be held in the afternoon.

But the main driver of financial markets today is likely to be news from the United States, where it is expected to publish a report on sales in the secondary housing market and the minutes of the FOMC meeting, at which it was decided to reduce the interest rate by 0.25%. Investors will look for signals about the regulator's further plans to adjust monetary policy in the United States.

On the chart, after a slight correction, the currency pair resumed its downward movement. Bears are gradually increasing pressure at the level of 1.1070, so in the near future we are waiting for the breakdown of this mark and the further development of the downward movement to 1.1035 and 1.1000.

Resistance levels: 1.1110, 1.1175, 1.1240.

· Support levels: 1.1070, 1.1035, 1.1000.

The main scenario is a breakdown of support at 1.1070 and a decline to 1.1000.

An alternative scenario is consolidation in the range of 1.1070-1.1110.

The bearish fundamental background still prevails. Signals in favor of further development of the downward movement also remain relevant on the chart. Inside the day, we give preference to shorts that are worth looking for in the region of the level of 1.1110.

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