As a rule, political news is just a kind of an irritant for financial markets. The consequences of a political turmoil are unpleasant, but non-fatal usually. When a country with the strongest economy in Eurozone does not succeed in forming the government, the national currency suffers. Today is not a good day for the euro, apparently. Neither is the worst one. Political uncertainty together with the lack of macroeconomic news is a tough part for EUR, but these are just temporary factors.
The Eurozone economic background has improved recently, which was enough for the Central Bank to start unwinding its QE program.
On Friday, Mario Draghi made overall positive comments on the job market, and there are two more speeches planned for today. The key question is: what will the Central Bank will in case the economy diverges from the base scenario?
If Draghi makes EUR to retreat below the 1.1720/00 area, we will see the falling towards 1.1660 first. The bulls anchor their hopes on the 1.1790/1.1800 resistance line.