EUR/USD heading lower in thin markets - playing catch-up
The market could be playing a little catch-up here with the political upheavals in Italy. As we have noted, the far-right leader (Liga) Salvini is keen to call a snap election as the coalition runs into a number of disagreements on policy, and with success in the European elections, the prospect of going it alone has encouraged him (Salvini) to try and seize sole power.
Last week we saw the BTP (Italian bond) yields pushing higher again on fresh nervousness of turmoil in Italy, though the response from the EUR was relatively tame. Today's price action may be a delayed reaction, with all crosses heading lower this morning, including the bullish EUR/GBP rate.
EUR/USD has been pressed down into the mid 1.1100's as a result and these levels may provide some support. However, a stronger push through 1.1150 may see the pair go on to test the next area of support, which is seen in the 1.1120-30 zone.