Italy Softens Stance on Budget, EU Leaders Seal the Brexit Deal

Euro Up on Italy, Down on Draghi

After tumbling on the disappointing Euro-area PMIs on Friday, the euro ended Monday mixed against its major peers. It gained against CAD, NZD, JPY and AUD in that order, while it underperformed against NOK, SEK, USD and GBP. The common currency traded virtually unchanged against CHF.

EUR/USD — Technical Outlook

EUR/USD continued moving lower, but yesterday it found support again near the 1.1325 barrier, which was last week’s low. The pair is still below its short-term downside resistance line drawn from the peak of the 20thof November, so as long as that line remains intact, we will aim for lower levels.

EU-UK Seal Brexit Deal, Parliament the Biggest Hurdle

Switching channel to the Brexit sequel, the EU and the UK finalized the Brexit deal at a special EU summit over the weekend, but given this was something broadly expected, the pound did not react much on Monday’s open. It did, however, gain against most of its major pears throughout the day.

GBP/CHF — Technical Outlook

GBP/CHF continues to balance above its near-term upside support line drawn from the low of the 7thof September. At the same time, the pair got stuck in a small range between the 1.2765 and 1.2835 levels. Even though GBP/CHF, at the time of this analysis, is declining, this could be classed as a correction before the pair moves back up again. If the above-mentioned upside support line remains intact, we will stick to the upside.

As for Today’s Events

The economic calendar appears relatively light today in terms of economic indicators. The ones worth mentioning are the US Conference Board consumer confidence index for November and the American Petroleum Institute (API) weekly report in crude oil inventories. The consumer confidence index is expected to have declined to 135.9 from 137.9, while as usual, no forecast is available for the API figure.

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