FxWirePro: EUR/USD regains above 1.1400 level, markets eye European Commission reaction to Italy’s budget plan

EURUSD has regained above 1.1400 level after more than 100 pips decline yesterday. Euro was trading weak against all majors after yield spread between German and Italy hits 5-1/2 year high. Markets eye European Commission reaction to Italy’s budget plan.The Eurpean Commission is expected to formally reject Italy’s budget plan. The Commission has already rejected Italy’s new budget deficit of 2.4% which is three times higher than size of the deficit of previous government. The Italy 10 year bond yield has declined more than 7% after hitting high of 3.76% yesterday . The yield spread between Germany and Italy has reduced from 330bpbs to 315 basis point. It is currently trading around 1.14254.

Technically near term resistance is around 1.14750 (55- day EMA) and any break above targets 1.1500/1.15500. The pair should break above 1.16200 for further bullishness. The minor resistance is around 1.1435.

On the lower side, near term support is around 1.1360 (20- day MA) and any convincing break below targets 1.1300/1.1215.Major trend reversal below 1.12000.

It is good to sell on rallies around 1.14325-350 with SL around 1.1475 for the TP of 1.1300.