- Euro bulls looking to push the bids higher in thin early Wednesday action.
- A likely non-starter from the ECB sees broader markets keeping an eye out for continued Italy headlines.
The EUR/USD is testing to the high side in early Wednesday action, pushing north of the 1.15 barrier ahead of the European markets.
The Italian budget snafu continues to be a bearish drag on the Euro, and recurring headlines focusing on headwinds from rising global tensions, including cautionary statements from the International Monetary Fund today, are adding to the cautious undertones in broader markets, but EUR bidders are indifferent for the time being, pushing the EUR/USD back off of the week’s low punched in yesterday at 1.1430, and Wednesday’s session will see a thin smattering of Euro-centric data.
At 07:00 GMT will be a European Central Bank (ECB) Non-Monetary Policy meeting, and the effects will likely be limited with the central bank focusing on non-fiscal policies, though too much attention by the ECB in the Italian bond field could see some volatility kick higher, followed closely by a speech from the ECB’s Mersch at 08:00 GMT. Wednesday is also slated for a 10-year German bund auction, and risk-off within the Eurozone could rear its head if the Italy-Germany bond spread continues to widen.
EUR/USD levels to watch
The Euro, despite trying to make a bullish play, still remains in bearish territory in the medium-term, and according to FXStreet’s own Valeria Bednarik: “the intraday recovery fell short of affecting the negative tone of the pair, as, by the end of the US session, it continues trading below its 20 SMA in its 4 hours chart, after failing to surpass the level at the beginning of the day, while technical indicators have recovered from their daily lows but lost upward momentum within negative readings. The immediate resistance continues being the 1.1500 level, but the pair would need to firm up beyond 1.1565 to shrug off the negative tone, at least temporarily.”
Support levels: 1.1460 1.1420 1.1475
Resistance levels: 1.1500 1.1530 1.1565