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Senior Analyst at Danske Bank Piet Christiansen noted the European currency should be under scrutiny ahead in the week.

Key Quotes

“In the majors, much focus has turned to EUR/USD as the cross last week broke out higher of its recent trading range. This week brings both the FOMC meeting and the publishing of the Italian budget proposal”.

“In isolation, we expect the former to act as a USD positive (comfortable Fed) while we expect the Italian budget deficit to fall well within the 3% of GDP threshold, which should confirm the recent diminishing of the political risk premium embedded in the EUR”.

“Overall, therefore, the data calendar provides an ambiguous near-term outlook and we think the cross is likely to end the week close to current levels”.

“We note that the June high of 1.1851 is a key resistance level; a break of this would open up for a test of 1.20″.