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Italy 40 Index & GBPUSD Outlook

The Italian stock market has been roiled by the political crisis in the country and by the running battle the new government is having with the EU. The Italian government is pushing back against the strict budget rules of the EU and the austerity budgets imposed on the country. The market remains subdued and is down from its highs achieved earlier this year around 24570.00. Price is consolidating around the 20500.00 area. The market has sold off from this week’s high of 20835.00. The August low of 20222.00 is the next support level. A loss of this area can see price drop to test the 20000.00 area with further support at 19829.00 followed by 19218.00.

Resistance can be seen at this week’s high of 20835.00 with a break higher from here looking to reach the 21000.00 level and build support for a short squeeze. This can develop on a move past the 21467.80 resistance area. Buyers would then seek to engage the 22242.00 level with a break above this point setting up a drive to gain 23000.00 and challenge the next resistance at 23400.00. From there a move to the highs at 24000.00 followed by this year’s high would become ambitious targets.

 

GBPUSD

The GBPUSD 1 Hour chart is showing a strong move higher since the report that Michel Barnier had offered to create an exclusive partnership with the UK post Brexit, creating the softest of soft brexits in the process. The Pound liked the news and gained on the day. It reached the high at 1.3045 yesterday and this level is now providing the resistance to beat on the chart. As this is the end of the month there may be unusual moves today in markets. Today’s high is found at 1.3029 with 1.30135 also influencing price.

Support for the pair can be seen at the Point of Control at 1.2989 with a loss of this level handing control to the sellers. A slip under 1.2980 can see losses extend to 1.2960 followed by the 1.2932 level coming in as Tuesday’s high. Continued selling on a retracement of the breakout move would target 1.2900 followed by the low at 1.2845.

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