On Monday, 5th of March, the most important item on the event calendar will be ISM data release for the service sector in the USA, which will be the second tip by Friday's data from the US labor market. Earlier, the PMI indexes for the service sector from France, Italy, Germany, the United Kingdom, the Eurozone and retail sales from the Eurozone will be published. Quarles from the Fed will speak in the evening.

EUR/USD analysis for 05/03/2018:

The estimated outcome of the Italian parliamentary election suggests that none of the factions will form a government. It is also difficult to imagine a stable coalition. The best result was achieved by the Populist Movement of the Five Stars (according to RAI 195-235 in the 630-member Chamber of Lower Lords). The coalition of center-right parties branded by Silvio Berlusconi will, however, be the biggest force, because according to preliminary estimates, it can count on 225-265 votes. The biggest losers are the center-left parties centered around the Democratic Party, which may introduce only 115-155 deputies to the Lower House. The Euro currency has therefore been supported by information from the German political scene (opening above 1.2350) and quickly plunged by reports from Italy (morning descent at 1.23).

Let's take a look at the EUR/USD technical picture at the H4 time frame in a more detail. The key technical support level is the zone of 1.2165-1.2206 tested last week and from the top, the road to 1.25 is closed several times by the defended zone of highs around 1.2350 - 1.2366. The market looks undecided which way it should go as the price has returned to the 1.2257 support level just after the results were published.The momentum is still above its fifty level, but the market starts to become a slightly overbought now. Only a clear sustained breakout above the level of 1.2366 opens the road towards the next technical resistance at the level of 1.2537 - 1.2555. Otherwise the horizontal trend will continue.