The EUR/USD pair had a back and forth session during the Friday trading hours, trying to break above the 1.3250 resistance level, and break below the 1.3150 handle that acted as support. In the end, the candle essentially went nowhere, and this makes sense considering that we have the Italian elections coming up.
In Italy, there are several possibilities that aren't necessarily a good thing for the Euro. Italy is the third largest economy in the European Union, and as a result what happens there will certainly have an effect on the economy in general. There are a lot of concerns that an anti-austerity candidate will win the position of prime minister, or perhaps a coalition that is a necessarily willing to back the recent austerity movement.
The Italians have been extraordinarily large amount of undecided voters this time around, and as a result the markets probably didn't want to carry too much risk in one direction or the other over the weekend. Because of this, it makes sense of the market essentially did nothing at the end of the session.
Turning point?
I believe that we could be seen the turning point in this pair, I just don't know which direction essentially because of the Italian elections. In the end, there are a lot of different things pushing the pair around, but it should be noted that there is a tall and of support below, and I have a hard time feeling this pair is going to melt down, unless of course we see something really bizarre come out of Rome.
That being said, I believe that the 1.30 level will more than likely be challenged if we break the lows from the Friday session. I also expect that level to hold a support. A bounce from that level should return the pair back to the 1.3250 level, and perhaps even the 1.35 level. I also believe that the markets are starting to focus on the European debt situation yet again, and as a result we will have generally choppy and messy trading. After all, it's been about two months that we've seen something erratic happen.