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EUR/USD fell to a new low of 1.3018 in the wake of the European morning. This is extension of the fall below 1.31 that was seen as news of a political deadlock emerged from Italy.EUR USD Approaches 1 30000 as Italian elections deadlock digested by the markets February 26 2013

The breach of support at 1.3030 was only temporary at the moment, and the pair could keep some distance from 1.30. The round line is eyed by many traders and politicians.

It’s important to note that even if the pair dips below 1.30, it could be only in order to take out barrier options, and the pair may rebound quickly. Further support appears at 1.2960.

Resistance is now at 1.31, followed by 1.3130. For more lines and events, see the EUR/USD forecast.

Counting has almost ended in Italy, and the picture is clear: the upper house is ungovernable. No natural political alliance is possible there. A combination of Bersani’s center left and Monti’s center is short of a majority. So is a a combination of Berlusconi, who won the biggest number of seats, and Monti. A right-left coalition seems out of question at the moment.

The big winner of the elections is Beppe Grillo. The former comedian’s 5 Star Movement made big achievements and it will not cooperate with establishment parties.

In the lower house, the center left PD led by Bersani won, but without any coalition in the upper house, the country will likely go to new elections.

For more about the results, see  Italian Senate Deadlocked – Grillo can trigger new elections

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