Home Forex Forex Market Analysis Daily Market Update: Italy’s Politics

Daily Market Update: Italy’s Politics

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News Commentary


 

Today is a quiet day on data, as it’s Memorial Day for the United States and a Bank Holiday in the UK. Globally, reporting will be limited to only a few scheduled datasets.

Italy’s president rejected a euro-sceptic pick for the key role of economy minister. Anti-establishment parties 5-Star Movement and League give up plans to form a government.

Italy’s president Sergio Mattarella is expected to ask a former International Monetary Fund official on Monday to head a stopgap government amidst political and constitutional turmoil, with early elections looking inevitable.

But the attitude to block a euro-sceptic economy minister enhanced sentiment towards the currency.

 

Japanese employment data is also set for release late on Monday. Unemployment likely to be held stable at 2.5% for April, according to a median estimate.

 

 


Chart Analysis


 

US INDEX

On the daily chart, the price has broken the lower trend line from the high of 2017.

But the price is located at the key resistance of 94.25.

There is a BAT harmonic pattern that boosts the retracement bias for the index.

Divergent on RSI assured this possible downfall.

So, If the price bounces beneath from the resistance level, it may reach 92.6 to retest the broken trend.



 

AUD/USD

On the daily chart, the price had a false break beneath the support zone 0.75-0.7535.

That enhances the harmonic pattern AB=CD, with breaking a descending channel.

The pair had risen with an engulfing candle and pulled back with a hammer, one touching the support zone again.

Along with divergence in RSI, the price is ready for the next move up to 0.774 which is a level with a combination of the lower trend line from the high of 2018 & the broken uptrend.



 

USD/JPY

The price has reversed from a very strong short-selling area, rebounding from the key resistance level at 111.1 and the lower trend line from the high of 2015, also reversing from the top edge of the upward channel along with forming an AB=CD harmonic pattern with overbought on RSI.

The price has broken the key support level 110.05 along with the ascending channel.

So, the price is supposed to revisit the support level at 1.08.15.



 

NZD/USD

On the daily chart, the pair had broken the upward trend line from the low of 2009, but then the price made its way up to retest the trend, with oversold on RSI.

We can also notice that there’s a descending channel that the price has already broken, along with a harmonic pattern (BAT) which is already shaped. So, we can conclude that the last break beneath the upward trend line was a false break and the pair is about to restart its bullish momentum towards the resistance zone of 0.697-0.702.



 

AUD/JPY

On the daily chart, as we expected, the price reached the resistance zone at 84-84.35 affected by shaping a head & shoulders reversal pattern.

The price couldn’t break through this area to bounce back.

It could reach the support levels at 81.25-80.5 to pull back up again. As the pair is currently moving sideways.



 

USD/CAD

On the daily chart, the price had made its way into the resistance zone of 1.289-1.298, also reaching near the key resistance at 1.309.

With an approach from the descending trend line starting from the high of 2015 and the upper edge of the horn pattern.

If the daily candle closes beneath this zone again with suitable price action, it will prompt the price to be bearish to the support zone 1.2525-1.2415.



 

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