FxWirePro: Daily Commodity Tracker - 21st March, 2022 
Earlier today, we at FxWirePro pointed out that retail sentiment has finally flipped in favor of euro bulls and single currency might actually gain against the USD. However, today doesn’t seem to be the day for the bulls as Italian deputy Prime Minister Matteo Salvini’s budget comments are dragging down the single currency.
Mr. Salvini, who is the chief of Italy's populist League Party, and currently serves as the deputy Prime Minister and widely considered as the most powerful figure in Italian politics suggested that his country can break EU budget rules in order to boost the economy and employment. He suggested, “If we need to break some limits, like the 3% or the 130-140%, we’ll go ahead…….. Until unemployment is halved in Italy until we reach 5%, we’ll spend everything that we have to spend”.
As Italian two-year bond declined on the comments pushing the yield to the highest level since February, the euro declined. However, we believe that as the move has been based on just comments rather than actual budget breach, the effect could fade soon enough.
As said earlier that the retail sentiment is pointing to the upside in euro, despite the recent decline. The retail sentiment is largely used as a contrarian indicator. According to data from IG Markets, 53 percent of retail positions are short on EUR/USD, which gives the pair bullish bias.
