Italy’s political struggles continue as parties failed to reach a deal. Head of State Mattarella will ask Draghi to form a government. It is still unclear that Draghi will accept or even if he accepts, will parties support it but markets will welcome him if that happens. Italy currently in its worst recession since World War II. But with the possibility of “Super Mario” to take the seat, the 10-year yield already surged to 2 week low.
EURUSD is testing the uptrend line which started in May and backtesting the key medium-term support 1.20. If Draghi can form a government, EURUSD will most probably positively affected by the economy-friendly former ECB chair’s presidency.