Daily news: Italian government to reduce the budget deficit

Daily news: Italian government to reduce the budget deficit

  • During the meeting of the Italian Cabinet of ministers it was announced about the plan to reduce the budget deficit to 2% in 2021. In addition, the goals for GDP were set. The deficit of GDP was forecasted to be at 2.4% in 2019 and 2.2% in 2020. This made EUR/USD increase. At the moment, the pair is moving upwards to the resistance at 1.1610 (50-day MA). The next resistance is at 1.1661. In case of any negative news concerning the EUR, the price will go down to the support at 1.1507.

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The Italian prime minister called for another budget meeting at 14:00 MT time. We’ll keep you updated on the situation.

  • The UK Prime Minister Theresa May is forced to set a time when she leaves her post according to the British articles. However, the British Cabinet office minister Lidington said it was not true. Moreover, he added that they are looking for more details for the decision on the Northern Irish Border.

In other news for Great Britain, yesterday an opponent of May Boris Johnson unexpectedly supported her during the Conservative party conference. As a result, GBP/USD gained a little, bounced off the support at 1.2970 (50-day MA) up to the resistance at 1.3080. If there are any negative Brexit updates, the price will go back to the support. In addition, services PMI of the UK was released today. It came out a little bit lower, than in the forecasts (53.9 vs 54.0), but it did not have a major effect on the currency.

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Take a note that Theresa May will deliver her speech at 13:30 MT time. This speech may affect the British pound significantly.

  • A very busy evening will be today for the USD: there will be speeches of the Federal open market committee members and the Chairman of Federal Reserve Jerome Powell. It’s expected that they would give some outlook on the future of monetary policy of the US. Moreover, non-manufacturing PMI will be released today. It’s expected to be lower, than in the previous month (58.5 vs 58.0).

 Right now the price of the USD index is trading in the red zone, testing the support at 94.90 (50-day MA). If the price continues to decline, the next support will be at 94.60 (200-day MA). Evening speeches can affect the USD index positively. In that case, the resistance is at 95.36.

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  • Reserve Bank of Australia (RBA) had a meeting yesterday. They mentioned that the key factors preventing the policy normalizations are slow wages growth, low inflation and falling house prices. Analysts expect the RBA will start increasing the interest rates if the inflation rises. Today AUD/USD has crossed the support at 0.7177 and is falling downwards to the next support at 0.7133. If the AUD is supported by positive data, the resistance is at 0.7246.

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