· The euro rebounded on Wednesday after reports that Italy plans to reduce its budget deficit over the next three years, but traders said the rally could be short-lived.
Uncertainty surrounding Italy’s debt, fiscal plans and future ties with Europe have unnerved markets recently and exacerbated tensions with other euro zone leaders.
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The EUR/USD jumped 50 pips to a session high of 1.1594 a few minutes before press time and was last seen trading at 1.1585.
The news that Italy intends to rein in its budget deficit to 2 percent of GDP in 2021 likely put a strong bid under the common currency.
EUR/USD Technical Levels
Resistance: 1.16, 1.1640, 1.1660
Support: 1.1536, 1.1505, 1.1422
· The draft of Italy's budget plan says the nation plans to cut its budget deficit to 2 percent in 2021, according to Italian daily newspaper Corriere della sera.
Key points
Government is forecasting a deficit of 2.4% of GDP for 2019 and 2.2% for 2020
Italy is planning to control the deficit via spending cuts due to pressure from the EU
· Oil prices were firm on Wednesday on expectations of tighter markets once U.S. sanctions target Iran’s petroleum industry from next month, although a strong dollar and rising U.S. crude supply curbed gains.
Brent crude oil futures LCOc1 were at $84.89 per barrel at 0646 GMT, up 9 cents from their last close.
U.S. West Texas Intermediate (WTI) crude futures CLc1 were up 7 cents at $75.30 a barrel.
Traders said global oil markets remained tense because of the looming U.S. sanctions against Iran’s oil exports, which kick in from Nov. 4.
· Crude Oil WTI Technical Analysis: Climactic buying can lead to pullback down towards $74.00 a barrel
Crude oil bull trend is trading at levels not seen since late 2014.
Crude oil is trading well above its 50, 100 and 200-period simple moving averages (SMA) suggesting strong bullish momentum.
However, the last bull leg was rather climactic and the market might be ready for a pullback towards 74.00 and 73.00. On the flip side, a bullish continuation would target 77.83 level (November 21, 2014 high) and 80.00 round figure.
Main Trend: Bullish
Resistance : 75.24, 77.00, 77.83
Support : 74.00, 72.00, 71.45
Reference: Reuters, CNBC, DailyFX
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