Political issues continue to cloud......>

EURO-DOLLAR: Political issues continue to cloud the outlook for the Euro.

Italian elections (as soon as this year) are looking even more likely. Former

IMF-er Cottarelli's appointment as Italian PM-designate by the President needs

to survive a confidence vote, which will be tough going as M5S/League coalition

holds a majority if they vote together. If Cottarelli does not pass the

confidence motion then an election could come "after August." Cottarelli is

expected to name his cabinet ministers within the next 24-hours.

- Spain is also presenting its own political issues with PM Rajoy set to face a

confidence motion on Friday.

- EURUSD last 1.1625, after printing YtD lows of 1.1608 in EU/NY hours.

- Bears retain overall focus on tests of the November 2017 lows (1.1552)

following the fresh 2018 lows that were printed on Monday, although the

Bollinger base & oversold studies are the key concerns with potential to limit

follow through. Layers of resistance remain, adding weight to the bearish case.

Bulls still need a close above the May 24 high (1.1750) to ease bearish

pressure.