EUR/USD settles below 1.3550

FXstreet.com (Córdoba) - The rally of the euro against the dollar stalled at the 1.3555 zone during the New York session as investors refrain from taking big positions in an uncertain environment.

On one hand, there is political turmoil in Italy after Berlusconi's decision to withdraw his party's support from the coalition government over the weekend. On the other hand, the US is one inch away from a fiscal shutdown. Lawmakers have until midnight to pass an emergency measure to keep the federal government running starting Tuesday, the beginning of the 2014 fiscal year.

EUR/USD failed to break above the 1.3555 zone and entered in a consolidation phase that has extended over the last hours. At time of writing, EUR/USD is trading at the 1.3530 area, still 0.3% above its opening price.

EUR/USD technical outlook

From a technical perspective, Valeria Bednarik, chief analyst at FXstreet.com notes that short term technical readings maintain a bullish tone, "all of which leaves little room to the downside despite the ongoing risk aversion sentiment among investors".

Bednarik locates immediate resistances at 1.3570 and 1.3615, while she sees supports at 1.3490, 1.3460 and 1.3420.