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  • Euro unable to recover consolidates losses across the board.
  • EUR/USD heads for lowest daily close since July 2017.

The EUR/USD pair approached daily lows and managed to remain on top and also above the 1.1500 mark. Although still remains under pressure consolidating daily losses. The euro extended losses against the Swiss Franc.

Italian politics at center stage

The political crisis in Italy triggered a sharp slide in European equity prices. The FTSE 100 lost 1.26%, the FTSE MIB 2.65% and the IBEX 35 2.49%. Italian bonds soared

The designate PM Carlo Cottarelli will see President Sergio Mattarella again on Wednesday. He did not present a list of ministers while the President is likely to be evaluating a call to general elections July 29.

The situation in Italy is likely to be a key driver in EUR/USD on Wednesday but traders will also take a look to US data to be released tomorrow that includes the ADP report and a fresh Q1 GDP reading.

Levels to watch

EUR/USD lost strength slightly below 1.1600 and pulled back under 1.1550. During the second half of the American session dropped to 1.1519. Near the end of the session was trading at 1.1530, headed toward the lowest close since July.

The negative tone remains intact particularly with the consolidation near daily lows. A test of 1.1500 during the Asian session seems likely, below the next strong support might be seen at 1.1475.

To the upside, the immediate resistance is seen at 1.1590/1.1600 and above at 1.1640. A recovery above 1.1.740 would remove the short-term bearish bias.