EURUSD: The pressure on the euro increased after the Italian authorities began to talk about increased costs again. Consumer

A good report on the US economy and the growing tensions associated with the future fiscal policy of Italy, deters investors who put on further growth of risky assets. In confirmation of this is the sharp increase in the yield of Italian government bonds, indicating the resumption of the conflict between the government and Brussels.

Concern emerged immediately after the results of the European elections, in which Italian Deputy Prime Minister Matteo Salvini strengthened his position. Let me remind you that he is a supporter of higher spending and has a negative attitude to the austerity that Brussels so demands. Yesterday, Salvini has already announced its intention to challenge the EU rules setting limits on public debt and spending.

Last year, Italy has already tried to expand and go beyond the established budget deficit but met with very strong resistance from the EU.

As noted above, a good report on American optimism, which continues to grow in relation to the economy, was supported by the US dollar yesterday afternoon.

According to the report of the Conference Board, the consumer confidence index in May 2019 rose to 134.1 points against 129.2 points in April. Economists had expected the index to be 129.5 in May. A good rise in the index is directly related to the good state of the labor market, as well as the growing economy.

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Data on manufacturing activity in Texas was ignored by the markets, despite the fact that it grew at a slower pace in May.

According to the Fed-Dallas report, the production index in May of this year was 6.3 points against 12.4 points in April. The general index of business activity in May fell to -5.3 points.

The data from S&P/CoreLogic/Case-Shiller also did not please traders, but the decline in house prices is directly related to falling demand and high interest rates, which was not unexpected for investors. According to the report, the national index of housing prices in March increased by only 3.7% compared with the same period of the previous year, after rising by 3.9% in February. Meanwhile, Case-Shiller noted that, given the overall picture of the economy, the situation in the housing market could be better.

As for the technical picture of the EURUSD pair, it is quite likely that the pressure on risky assets will continue. An unsuccessful return to the resistance level of 1.1170 will lead to another wave of short positions in the trading instrument, which will allow the bears to reach a minimum of 1.1140. However, the main goal is larger support in the area of the minimum of the month – 1.1110. The upward trend will be limited to yesterday's resistance level at 1.1200.

The material has been provided by InstaForex Company - www.instaforex.com