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EUR/GBP rises to session high as Italy’s government is reported to mull budget deficit cut


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EUR/GBP climbs to a high of 0.8868 on the day


The euro is catching up with commodity currencies on the day as positive tones coming out of Italy is helping to underpin the single currency on the session. Italian bond yields are falling off as the government is reported to mull cutting the deficit target from 2.4% to 2.0% or 2.1%.
For EUR/GBP, price is now threatening a break of the 200-hour MA (blue line) as buyers look to break the near-term bearish bias in the pair. There is immediate resistance to come from the 100-hour MA (red line) @ 0.8878 so there is still work to be done before a further upside break can be observed.
Looking at the bigger picture:

Price continues to lean on the 200-day MA (blue line) for support over the last few sessions and that will be the line in the sand for any break to the downside. As for any upside move, it’ll require a break of the 100-day MA (red line) @ 0.8884 as well. That will shift the bias in the pair to become more bullish and target towards the 38.2 retracement level @ 0.8928.
As Italian budget worries are starting to be reconciled and May’s Brexit deal continues to look improbable at getting past parliament, it’s setting up for a good bet for an upside break once those key resistance levels give way.

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