Wednesday, November 9, 2011

FOREXYARD: Forex News Blog

FOREXYARD: Forex News Blog

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Italian Parliamentary Vote Could Boost EUR

Posted: 08 Nov 2011 01:21 AM PST

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A vote today in the Italian Parliament at 14:30 GMT may hold the key to Berlusconi's future as Italian Prime Minister. If today's events play out anything like yesterday's rumor of his impending resignation then the ouster or Berlusconi could be EUR positive.

Today's budget vote may signal Berlusconi has lost his governing majority and a no confidence vote would likely follow to remove the Italian Prime Minister from office. Berlusconi is a survivor and has faced no confidence votes the past.

But both political and economic pressures are building. Recently his party members have been abandoning him with others publicly calling for the resignation of the PM. Pressure continues to be felt in the Italian debt markets with the yield on the Italian 10-year BTP rising to an EMU high of 6.67%.

Traders may remember the price action from yesterday with the EUR/USD climbing 60 pips on a rumor Berlusconi would be tendering his resignation. Those rumors proved to be false and the EUR/USD quickly surrendered those gains. The pair has been testing the falling resistance line off of the October high which comes in today at 1.3780. Additional resistance is found at the 20-day moving average at 1.3840 and last week's high of 1.3870. Support is located at 1.3700 from the bottom of the narrowing range that has formed since the beginning of the month.

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